Valuation

802 views 3 replies

Dear All,

 

I am very weak in excise can someone clartify this base logic

Why Excise Duty to be calculated on Assessable value and not on Invoice Price?

Is practically Invoice price is the Assesable value

Please help me in understand the above logic as i am not able to go forward with the topic

(Practically how they calculate the excise duty)

Regards

Narayan

Replies (3)

Yes, Excise duty will be calculated on assessable value.

Otherwise the provisions regarding valuation of goods are given in Section 4 of Central Excise Act 1944 and the specified rules therein.

As far as the logic behind considering any value to be assessable value is its transaction value(Invoice value ) only as the section 4(1)(a) suggests.

However in circumstances where this value can be manipulated by the assessee (Eg when sold to related party etc) the valuation rules are prescribed in Section 4(1)(b) for determining the assessable value.

Four condition in Sec 4(1)(a) specified are as follow:

(1) Goods must be sold by the assessee,

(2) Buyer and seller must not related persons

(3) Price must the sole consideration for the sale.

(4) Delivery of the goods must br at the time and place other than place of removal

If all the above condition satisfied then transation value is the assessble value if any one condition is not satisfied then assessable value shall be determined as per the Central Excise Valuation ( Etermination of Price of Excisable Goods) Rule 2000.Rule 4 to Rule 10 and Rule 10A is specified in this behalf in these rules.

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