Packing material supplied by buyer to be included for excise

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CA. BIJENDER KR. BANSAL (Querist)

12 November 2008 Dear All,

Whether Packing Material supplied by buyer to be included for valuation of basic value for excise duty purpose or not.

Packing material is used for packing of finished good mfg by seller.

Please suggest with rule & case etc regarding it.

Thanks & Regards

CA. B.K.BANSAL

PAGE 1,

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)

12 November 2008 It is included in the valuation, if the finished goods can not be despatched without that packing.

CA. BIJENDER KR. BANSAL

CA. BIJENDER KR. BANSAL (Querist)

12 November 2008 Dear Mr. S.Srinivasaraghavan

Thanks for reply.
Please give the reason of it with Excise Rule in supporting of answer.

Nirav Vora

Nirav Vora (Expert)

12 November 2008 It is an intregal part of cost if the supply of goods can not be made without packing material. say for e.g for supply of Glass, you need to pack it into boxes than cost of packing material is included in valuation of goods.For further clariffication see the rules of excise act.

Ravikumar.G

Ravikumar.G (Expert)

18 November 2008 Circular Dt 1.7.02 has clarified that if packing material is provided by the buyer, price would not be the sole consideration and therefore valuation has to be done as per Rule 6 of the valuation rules, 2000 and the cost has to be considered for the valuation. Further if such packing material can be repeatedly used, the cost has to be amortized.

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