Excise valuation doubt. please help!

Rakesh Rao (CA Final Student) (408 Points)

14 August 2011  

Hello friends, Please clear my doubt!!

Rule 4 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 pertains to Valuation of Free Samples given to Buyer. How is the Transaction Value of the principal item in following situations determined?:

  1. Free item given with a goods produced & sold. (Eg. Buy Toothpaste, Get brush free)
  2. What if by chance, the brush is expensive than toothpaste?
  3. Buy 1, Get 1 free (Eg. Buy 1 Buiscuit packet, Get 1 free)
  4. What if the free item is Exempt from Excise Duty?
  5. What if free item is taxable, but Principal Item is Exemp?
  6. Chance to win a Gift? (Eg: Chance to win a gold coin in Soap)
  7. Chance to win Cash prices?
  8. Challenge by company? (Eg: Pure It Rs. 1 crore challenge! What if somebody wins it?)
  9. Chances to win discount in wrappers? (Eg: Under crown of a softdrink)
  10. Continuation of 9th que.... What if the crown contains amount which is more than the price of the soft drink?
  11. Goods sold under Exchange offer (Eg: TV sold in exchange of an old TV)

Kindly, mention the answers with corresponding numbers.

Also please support your answers with relevant Rules and Case Laws if available!

 

Also pls share more situations which I might have missed out!!


Thanks in advance!!