Excise duty

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shoeb parwaiz (Querist)

21 December 2011 Dear All,

I don't have sufficient knowledge about Excise Duty, Would u please elaborate me about excise duty from the basic. Followings are my main queries:

1)What is Assessable Value & how it is calculated?
2)Who can avail the exemption of Rs1.50 crore?
3)What is the concept of excise if organisation is manufacturing any brand?
4)What is the abatement & how it can be availed on any product.
5)What is relation of retail price of any product with the calculation of excise duty

As in the beginning of my letter i said i don't have sufficient knowledge about excise but i have hope from all of you who always helped me innumerable time & guide me time to time as a real Guru. I'm really grateful to all of you who always ready to help the people like me.

Thanks once again to all the respected experts of CA-CLUB INDIA.

Regards

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)

21 December 2011 Read the link:
https://www.caclubindia.com/forum/assessable-value-92531.asp

W.e.f. 01.03.2011, excise duty is leviable on ready made garments. An exemption of Rs. 1.5 crores is also available under the act.

for more info:
https://www.cbec.gov.in/ub1112/doltr-post-bud.pdf

https://www.cbec.gov.in/excise/cxt-2011-12/cxt1112-idx.htm

CA Abhijeet N. Bobade

CA Abhijeet N. Bobade (Expert)

21 December 2011 Answers to the given questions are as foloows:
1) As you know excise duty is charged on manufacture of any article which is specified in CITA. So for any article which is fall in the perview of manufacture & for that article rates are given in the CITA, then Assesseble value (means taxable value) is Invoice Price. Further, Invoice price is multiplied by the rate of duty for calculation of taxable amount.

2)SSI Units can avail the 1.50 crore exemption subject to some conditions which mainly contains a) SSI turnover for p.y should not cross 400 lacs b) SSI not manufacturing any Branded article (except some articles)c)Exprort to NEPAL & BHUTAN shall form part of 400 lacs condition.

3)If any manufacturer manufactures any branded goods on behalf of the brand holder then SSI exemption is not available to that manufacturer. for eg. if you manufacture Sleepers for BATA then 150 lacs exemption is not available to you & not even to BATA.

4)In rough sence, Abetment means some kind of discount(On duty payments) available to assessee if he follows some conditions given by the excise department. Abetment schems are notified by the excise department from time to time & which is conditional for specified good, so we can say that abetment is available for selected articles if notification is available for the same.

5)There are certin articles on which MRP specification is obligatory due to statutes (like Pharma products), so in that case, Excise duty is chrgeable on MRP value after deducting specified percentage of abetment. for instance: IF you are manufacturing Digene, then it is compulsory to show MRP on bottle, say, MRP printed on bottle is Rs. 100 & Abetment is available is 40% then you have to Pay Excise duty on Rs. 60/- (100- 40% abetment i.e Rs. 40=60 is Assesseble Value) This is govern under Sec.4A of CEA.

As you mentioned in your query that you are new to the ecise laws, so, i am avoiding tecnical wordings while writing my answer.If you need any further assistant please write me on abhijeetbobade@gmail.com

Thanks & Best Regards,
CA Abhijeet N. Bobade

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