Excise valuation

Originally posted by : Vijay
	It can be arguments fr both  bt looking to it AV should be 14000

yeah that's what i feel...

Hello

Assessable value is 15000

Discount given due to advance doesnot affect the assessble value.

Please let me know if you have any query.

As per Section 4(3)(d) of the Central Excise Act, 1944 , 

“transaction value” means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods.

From the definition above, the words Paid or Payable used indicates only a net amount. Trade discount, Cash discount, Warranty discount, prompt payment discount, quantity discount etc would not form part of the value.

Hence discount need to be subtracted to arrive at the assessable value. Thus , Assessable value in this case is Rs 14,000.

Note: TRANSACTION VALUE AS ASSESSABLE VALUE

‘Transaction Value’ is taken as Assessable Value only if goods are sold at the time and place of removal, buyer is unrelated and price is sole consideration [Section 4(1)(a) of Central Excise Act].

When duty is payable on ad valorem basis, it is payable on assessable value as defined in section 4 of Central Excise Act.

Hope it is clear 

Originally posted by : Dhruvi N suthar
	Hello Assessable value is 15000 Discount given due to advance doesnot affect the assessble value. Please let me know if you have any query.

Thanks for ur reply sir.... Please explain to me the reason nd rule applied here..... 

Isn't this discount in the nature of a cash discount which is deductible from the agreed price???

The AV would be 15,000 . Book is right.  

Rule 4(1) concept of Discount and related persons are not taken in consideration.

Hello Sunshine,

As Said by Renu singh Discount & Related person are not taken into consideration.