Excise is calculated on the assessable value (cost+profit).
If Free goods are given for Sales Promotion, like, 1 box free with 12 boxes, would the 1 free box be charged for excise calculation or its value be excluded for excise.
I talked to our Range Supridentent and he told me that if I am getting consideration ONLY for 12 boxes, then that 1 free box would not be charged for excise purpose. Only 12 boxes Assessable Value would be taken for calculation.
However while reading excise chapters, i have come to know that in most of the cases, the courts have favoured the revenue department and wants excise to be levied on that free item as well.
Another thing, would i have to intimate the Excise Dept of my intention to give free item for Sales Promotion?
Can an informed senior member help me on this regard?
CAclubindia
