Ad valorem

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Hello

According to CBEC  1/2011 notification the excise duty is calculated at the rate of 1% ad valorem(presently it is 2%).  The notification contains goods specied according to sec 4A of Central  Excise Act, ie., MRP basis of valuation. Here my doubt is whether MRP Based value can be treated as Ad valorem value in this case

 

Jishnu

Replies (2)

No ,

as both are different aspects  and section 4A is very special basis of valuation on MRP.yes

AD valorem means according to value. Sec 4 &4A prescribes method of valuation based on transaction value and mrp less abatment. So, both gives a value on which duty is payable. Said notification is for lower rate and applicable for all the goods specified therein whether it is taxable at a value under Sec 4 or 4A.

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