Goods supplied to trust on charity

This query is : Resolved

Guest

Guest (Querist)

06 January 2016 Hi, please clarify whether we need to pay excise duty for goods supplied to charitable institutions at free of cost. The trust is registered and eligible for exemption under IT. Thanks in advance

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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06 January 2016 Charitable Institution /Registered NGOs importing goods, have been exempted from Customs duty :

[Notfn. No.30/04-Cus. dt. 28.1.2004].
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52
of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, and in
supersession of the notification of the Government of India in the Ministry of Finance (Department of
Revenue) No. 18/1999-CUSTOMS, dated the 11th February, 1999, published in the Gazette of India,
Extraordinary vide, G.S.R. No. 99(E), dated the 11th February, 1999, hereby exempts second hand computers
and computer peripherals including printer, plotter, scanner, monitor, keyboard and storage unit from the
whole of duty of customs and additional duty of customs leviable thereon under the First Schedule of the
Customs Tariff Act, 1975 (51 of 1975), when received as donation by –
(i) a School run by the Central Government or, Government of a State or, a Union territory or, a local body;
(ii) an Educational Institution run on non-commercial basis by any organization;
(iii) a Registered Charitable Hospital;
(iv) a Public Library;
(v) a Public Funded Research and Development Establishment;
(vi) a Community Information Centre run by, the Central Government or, Government of a State or, a Union
territory or, local body;
(vii) an Adult Education Centre run by the Central Government or, Government of a State or, a Union
territory or, a local body, or
(viii) an organisation of the Central Government or, a Government of a State or, a Union territory, from a
donor outside India, subject to the condition that the said organisation undertakes to observe the procedure
prescribed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs having
jurisdiction, for transport of the said goods from the Port or Airport or Land Custom Station or Inland
Container Depot to its premises and such goods shall not be used for any commercial purposes, and shall
not be sold, disposed of, gifted, loaned, exchanged or parted with, without the permission of the said

ANIL JANGID

ANIL JANGID (Expert)
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07 January 2016 Answer is 'NO'. No exemption from Central Excise duty is available to charitable institutions. See Notification No.10/97-CE dated 1.3.97 as amended vide Notification No.16/2007-CE dated 1.3.2007 and Notification No.28/2013 CE dated 1.10.2013. In this notification, definition of 'Hospital' includes Trust, Society, Association etc. which renders medical, surgical or diagnostic treatment. Otherwise also no exemption is admissible. It is pertinent to point out that samples distributed free of cost are to be assessed under Rule 11 with the spirit of Rule 8 i.e. at 110% of the cost of manufacture. Board's Circular No.915/5/2010-CX dated 19.2.2010 refers.

ANIL JANGID

ANIL JANGID (Expert)
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09 January 2016 Answer is 'NO'. No exemption from Central Excise duty is available to charitable institutions. See Notification No.10/97-CE dated 1.3.97 as amended vide Notification No.16/2007-CE dated 1.3.2007 and Notification No.28/2013 CE dated 1.10.2013. In this notification, definition of 'Hospital' includes Trust, Society, Association etc. which renders medical, surgical or diagnostic treatment. Otherwise also no exemption is admissible. It is pertinent to point out that samples distributed free of cost are to be assessed under Rule 11 with the spirit of Rule 8 i.e. at 110% of the cost of manufacture. Board's Circular No.915/5/2010-CX dated 19.2.2010 refers.

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