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Plz.... help - Excise on Tool Amortisation


CA. BIJENDER KR. BANSAL (ACA, B.COM)     10 October 2007

CA. BIJENDER KR. BANSAL
ACA B.COM 
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Dear All,

As a manfacturer , we have charged Excise duty on tool amortisation cost on mould of Vendor company. i.e Assesable Value for Excise duty is Sales price plus tooling cost per unit. We charged Excise duty on it and deduct tooling cost from total bill amount.

Now our new vendor asked us regarding Rules/Notification/ Circular of Excise in which is it mentioned that Excise duty is to be charged on Tooling cost.

Plz ......... Help me . It is urgent.

Thanks & Regards

CA. B.K.Bansal

 

 

 

 

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Pradip B Vaidya (Service)     12 October 2007

Pradip B Vaidya
Service 
 59 points

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Pl refer CBEC circular no 170/4/96 dated 23-1-1996. [also refer 1996 ( 82) ELT T5

avater

Shaily Jain (Chartered Accountants)     12 October 2007

Shaily Jain
Chartered Accountants 
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Tools included in capital goods so b can take the creedit of it n also excise is applicable on it

avater

CA. BIJENDER KR. BANSAL (ACA, B.COM)     12 October 2007

CA. BIJENDER KR. BANSAL
ACA B.COM 
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HI, THANK FOR REPLY. BUT MY QUESTION IS REGARDING TO TOOLING AMORTISATION. IN THIS CASE TOOL IS ASSET OF CUSTOMER WHICH IS SENT BY HIM FOR PRODUCTION OF FG. WE HAVE TO ADD TOOLING AMORTISATION COST PER UNIT IN SELLING PRICE FOR ASSESSABLE VALUE FOR EXCISE PURPOSE. YOUR REPLY IS REGARDING PURCHASE OF CAPITAL GOODS. tHANKS CA. B.K.BANSAL

Sanjay Dwivedi (Advocates & Consultants C. Ex)     16 October 2007

Sanjay Dwivedi
Advocates & Consultants C. Ex 
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Dear Mr. Bansal, The question of amortisation will arise only if the tooling was supplied free by the customer (or if it's cost is recovered separately by the manufacturer). In such a situation, the cost of tooling becomes an additional consideration for sale. Rule 6 of the C. Excise Valuation (DPEG) Rules, 2000 requires addition of the 'money value of additional consieration' to the transaction value. The explanation 1 to the said rule reads as under, and makes the thing more clear: Explanation 1 - For removal of doubts, it is hereby clarified that the value, apportioned as appropriate, of the following goods and services, whether supplied directly or indirectly by the buyer free of change or at reduced cost for use in connection with the production and sale of such goods, to the extent that such value has not been included in the price actually paid or payable, shall be treated to be the amount of money value of additional consideration flowing directly or indirectly from the buyer to the assessee in relation to sale of the goods being valued and aggregated accordingly, namely:- (i) value of materials, components, parts and similar items relatable to such goods; (ii) value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar items used in the production of such goods; (iii) value of material consumed, including packaging materials, in the production of such goods. (iv) value or engineering, development, art work, design work and plans and sketches undertaken elsewhere than in the factory of production and necessary for the production of such goods. Pls feel free to mail me for any further clarification. Sanjay R. Dwivedi Advocate

(Guest)

Originally posted by :Pradip B Vaidya
" Pl refer CBEC circular no 170/4/96 dated 23-1-1996.

[also refer 1996 ( 82) ELT T5

 
"


 

sunil (excise incharge)     07 August 2009

sunil
excise incharge 
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Originally posted by :CA. B.K.BANSAL
" Dear All,
As a manfacturer , we have charged Excise duty on tool amortisation cost on mould of Vendor company. i.e Assesable Value for Excise duty is Sales price plus tooling cost per unit. We charged Excise duty on it and deduct tooling cost from total bill amount.
Now our new vendor asked us regarding Rules/Notification/ Circular of Excise in which is it mentioned that Excise duty is to be charged on Tooling cost.
Plz ......... Help me . It is urgent.
Thanks & Regards
CA. B.K.Bansal
 
 
 
 
"


 

We are a DTA unit , We had charged excise duty for Tool Cost  to another DTA unit, but the tool is with me only. Is excise duty applicable for this. The Customer had informed me that Excise duty is not applicable for this.Kindly explain.

Rgds

Sunil

K.M. Rama Naik (Manager - Accounts)     17 September 2009

K.M. Rama Naik
Manager - Accounts 
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Dear Sir,

We are a DTA Unit We are having LUT(Letter of Undertaing) from Central Excise to Export the manufactured items.

Our Question We have made a tool for our abroad customer, we want to raise the invoice for tooling cost but tool will not be exported, by using the tool customer items will be manufactured and sent, it can be cleared it under LUT with nil rate of Excise Duty?

If possible Pl provide notification under Central excise

K.M. Rama Naik (Manager - Accounts)     17 September 2009

K.M. Rama Naik
Manager - Accounts 
 32 points

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Dear Sir,

We are a DTA Unit We are having LUT(Letter of Undertaing) from Central Excise to Export the manufactured items.

Our Question We have made a tool for our abroad customer, we want to raise the invoice for tooling cost but tool will not be exported, by using the tool customer items will be manufactured and sent, it can be cleared it under LUT with nil rate of Excise Duty? means only export invoice will be raised for tool cost and excise duty will not be charged under LUT, tool will not be sent, is this permited or not.

If possible Pl provide notification under Central excise

K.M. Rama Naik (Manager - Accounts)     09 December 2009

K.M. Rama Naik
Manager - Accounts 
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Originally posted by :K.M. Rama Naik
"

Dear Sir,
We are a DTA Unit We are having LUT(Letter of Undertaing) from Central Excise to Export the manufactured items.
Our Question We have made a tool for our abroad customer, we want to raise the invoice for tooling cost but tool will not be exported, by using the tool customer items will be manufactured and sent, it can be cleared it under LUT with nil rate of Excise Duty? means only export invoice will be raised for tool cost and excise duty will not be charged under LUT, tool will not be sent, is this permited or not.
If possible Pl provide notification under Central excise

 

please help me out by answering my above clarifications early.

 

"


 


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