Excise on profit

This query is : Resolved

kabs (Querist)
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22 October 2012 Friends,

Excise duty is charged on Which Amount?

I mean Excise duty is charged after adding profit.Do we have to charged excise on profit.

Suppose i bring a product X at 5000 rs and then sell it at 6000 rs without doing anything (for a profit of 1000 rs,due to difference in market price), in this case do i have to pay excise duty.If yes then how much? whether on 6000 or on 5000 rs.

or simply forward the excise burden to the buyer for the amount that i have paid while purchasing this product.

One of my friends is doing business in computer system, he has same query.Currently what he is doing is that he added word "system" to the purchased product and then charge excise duty.

so finally;

1)do excise is charged on the profit?
2)on which amount the duty will be charged if i purchase the product at 5000 and sold it at 6000 with profit of 1000 without doing anything.
3)what about the excise duty in above case if i donot amount to manufacturer?

Amol S Joglekar

Amol S Joglekar (Expert)
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22 October 2012 COST price may be a sale price of other and vice versa. If you are not a manufacturer, you do not have to pay excise duty. (VAT is a separate proposition.)

kabs

kabs (Querist)
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23 October 2012 thanks you very much

kabs

kabs (Querist)
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23 October 2012 Rule 26(a) of Legal Metrology Rule regarding Excise Valuation under section 4A do not apply to packages containing commodity if the net weight or measure of commodity is ten gram or ten ml or less...but there is MRP generally seen in candies like, "Eclairs" brand chocolates each weighing 5.5 gms.

Any Special Compliance of Law...?

Legal Metrology (Packaged Commodity) Rules (easlier standard of weights and measures rules)

--on behalf on one friends Ajeet Singh

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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21 July 2024 Under the Legal Metrology (Packaged Commodities) Rules, 2011 in India, there are specific provisions regarding the packaging and labeling of commodities, especially when it comes to small packages like candies. Here’s how it applies to candies like "Eclairs" brand chocolates weighing 5.5 grams:

1. **Net Quantity Declaration:**
- As per Rule 26(a) of the Legal Metrology (Packaged Commodities) Rules, packages containing a commodity where the net quantity or measure is 10 grams or 10 milliliters or less are exempt from certain provisions related to declarations under Section 4A of the Central Excise Act.
- This exemption means that for small packages like candies weighing 5.5 grams, specific requirements related to excise valuation under Section 4A do not apply. However, the rules still require compliance with other labeling requirements.

2. **Compliance with MRP and Labeling:**
- Even though Rule 26(a) exempts these small packages from excise valuation rules, they must comply with other essential requirements such as displaying the Maximum Retail Price (MRP), net quantity (weight or volume), and other mandatory declarations like the name and address of the manufacturer, packer, or importer.
- The MRP should be prominently displayed on the packaging, ensuring transparency for consumers regarding the price they are paying for the product.

3. **Legal Metrology Compliance:**
- The Legal Metrology (Packaged Commodities) Rules ensure that consumers are not misled by packaging and labeling practices. Manufacturers and packers of candies like "Eclairs" weighing 5.5 grams must adhere to these rules to maintain standards of fairness and accuracy in trade practices.
- Compliance with these rules helps in promoting consumer protection and fair trade practices in the market.

In conclusion, while small packages like candies weighing 5.5 grams are exempt from excise valuation under Rule 26(a) of the Legal Metrology (Packaged Commodities) Rules, they still need to comply with MRP and other labeling requirements to ensure transparency and fairness in consumer transactions.

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