Regading Excise duty Paid by Manufaturer

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Querist : Anonymous

Querist : Anonymous (Querist)

02 August 2010 It is compulsory to pay excise duty on manufacture goods which are use as free sampling???
Since it is advertising expenses and not revenue generated items.
Suggest me to save liability of firm regarding Excise duty.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)

02 August 2010 Yes excise duty should be payable on free samples given for sales promotion.

Section 4(1)(b) of the Central Excise Act states that if Assessable Value' cannot be determined u/s 4(1)(a), it shall be determined in such manner as may be prescribed by rules. Under these powers, Central Excise Valuation (Determination of Price of Excisable Goods) Rules 2000 have been made effective from 1-7-2000.

1. Value nearest to time of removal if goods not sold - If goods are not sold at the time of removal, then value will be based on the value of such goods sold by assessee at any other time nearest to the time of removal, subject to reasonable adjustments. [Rule 4]. This rule applies when price at the time of removal is not available as the goods are not sold by the assessee at the time of removal. Thus, this rule should apply in case of removal of free samples or supply under warranty claims. In case of removal of samples or free replacement under warranty claims, duty will be payable on price of identical goods sold by assessee near about the time of removal of the samples.

Please also see this link for detail dicussion--
https://www.caclubindia.com/forum/free-samples-for-sales-promotion-71529.asp

Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2010 Thanks

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