ACCOUNTANT (Student) (559 Points)
16 October 2011Can any one clarify what is the appropriate basis of valuation for free samples for charging excise duty...??
Would it be according to Rule 4 of Valuation Rules(value nearest to the time of Removal... which became the price available to wholesalers by the factory in my problem)
or Rule 8(which says about Captive Consumption of goods i.e. 110% of cost of production according to the valuation rules).....
Arun S
(CA Final)
(239 Points)
Replied 16 October 2011
Rule 4 only. There is an express provision in this regard.!
ACCOUNTANT
(Student)
(559 Points)
Replied 17 October 2011
Thankyou...but pl get my further query.. if MRP provisions are not applicable for valuation....and cost of production is known.......
Whether the free samples would be valued at 110% assuming the appropriate method to be captive consumption or just at the cost of production alone......
HS Negi
(Senior Executive- F&A)
(590 Points)
Replied 19 October 2011
Dear Swetha
Treatment of this will be as per mentioned below:
Condition No.01: If the product is marketable then the selling cost will be assessable value in case of free billing.
Condition No 02: If the product is not marketable then assessment will based on Cost of Production+10% (According to CAS-4).
Best Regards
HS Negi
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