Excise duty on cement

Prior to 2011-12 Budget, there was relevance of MRP. Post Budget, Excise Duty on Cement produced by Cement Manufacturing Units (other than Mini Cement Plants) attract Excise Duty as under (and there is limited play of MRP to decide whether fixed duty would be Rs. 80/- PMT or Rs. 160/- PMT) :

1. If MRP is upto Rs. 190/- Per Bag of 50 Kgs., the duty would be :

         Rs. 80 Fixed Plus 10% of transaction Value

2.  If MRP is greater than Rs. 190/- Per Bag of 50 Kgs., the duty would be :

         Rs. 160 Fixed Plus 10% of transaction Value

For Example, If MRP is Rs. 160/- per Bag of 50 Kgs. but sale price is Rs.140/- per bag inclusive of all duties and taxes and if, suppose VAT is 13.5%, the duty would be calulated as under :

Sale Price                                  =          140.00

Less VAT                                   =            16.65

Balance                                      =          123.35

Less :Fixed Duty                        =              4.00

Less :Cess on Fixed Duty          =              0.12

Balance                                       =          119.23

Duty & Cess @ 10.3%                 =            11.13

Assessable Value                        =          108.10

The above is not applicable for sale of cement in bulk (non-trade).

Regarding your second query, I would like to inform you that Cement not meant for retail sale can be sold in bags displaying such declaration and in all such cases duty would be 10%.

CA Dilip Kumar Agarwal

CA Dilip Kumar Agarwal