Excise Duty on Price revision

980 views 3 replies

Sunil Bafna

Finance Executive

34 Points Posted on 25 July 2011

The case is as follows:

The goods are cleared from the factory for delivery to depot and excise duty is paid on the price existing at depot on date of removal from factory. Subsequently on reaching of goods at depot the price is revised upward & sold at such revised price to the outsiders (non-associated parties). Note - MRP is not stated on the goods. Price list is revised.

Pls calrify the duty payable on such goods and on the goods existing at depot before clearance such second consignment of goods from factory. Also clarify, the excise duty to be stated in the invoice during sale of goods to non-associated parties where the sale is made at such revised price.

Replies (3)

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Posted on 27 July 2011

No differential duty is payable in respect of the goods lying at depot eventhough such goods are sold from depost at the revised price. This is for the reasons that duty has been correctly paid upon clearnce of such goods from factory based on the price prevailing at depot at the time of clearnce. Also sale to related party makes no diffrenec as long as you have sale to unrelated buyers as well.

Dilip Kumar Agarwal

128 Points Posted on 27 July 2011

I agree with views given by Mr Unnikrishnan. If the transaction value is not known at the time of removal of goods from place of removal, an assessee has got two options, viz , he may opt for provisional assessment (not advisable because of its inherent complications) and the other option is to clear the goods considering assessable value to be calculated on the basis of transaction value on which highest net aggregate quantity has been sold by that depot at/nearest to the time of removal from place of removal for such depot. If second option is exercised, it becomes irrelevant as to at what price that material has been sold subsequently and, therefore, no diifferential duty to be paid or refund to be claimed on account of actual transaction value being greater or shorter than than the one based upon which assessable value has been calculated.