Ex depot price

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2011 Sir,

what is the meaning of ex-depot price for the purpose of excise in case goods are sold from factory to warehouse, depot or some other place on consignment basis.....???

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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25 July 2011 When goods are sold through depot, there is no 'sale' at the time of removal from factory. In such cases, price prevailing at depot (but at the time of removal from factory) shall be the basis of Assessable Value. The value should be 'normal transaction value' of such goods sold from the depot at the time of removal or at the nearest time of removal from factory. [rule 7]
For example, if an assessee transfers a consignment of paper to his depot from Delhi to Agra on 5.7.2000, and that variety and quality of paper is normally being sold at the Agra depot on 5.7.2000 at transaction value of Rs. 15,000 per tonne to unrelated buyers, where price is the sole consideration for sale, the consignment cleared from the factory at Delhi on 5.7.2000 shall be assessed to duty on the basis of Rs. 15,000 per tonne as the assessable value. If assuming that on 5.7.2000 there were no sales of that variety from Agra depot but the sales were effected on 1.7.2000, then the normal transaction value on 1.7.2000 from the Agra depot to unrelated buyers, where price is the sole consideration shall be the basis of assessment. [Illustration given in the departmental circular dated 30-6-2000].

In short, price ruling at the depot, but at the time of removal from the factory will be relevant. It does not matter if subsequently the goods are actually sold from depot at higher or lower price.
At times, there are wide fluctuations in prices and depot prices may change frequently. This eventuality is indeed not envisaged in 'stock transfer' as 'stock transfer' or 'branch transfer' is envisaged only of standard products with fixed ex-depot prices. However, fluctuations in prices at depot is a practical reality. In such cases, assessee may resort to assessment on provisional basis.

for more information read the case:-

http://www.ebc-india.com/practicallawyer/index2.php?option=com_content&itemid=1&do_pdf=1&id=7310

Querist : Anonymous

Querist : Anonymous (Querist)

09 August 2011 thanks for ur reply....!!

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