transaction value - excise

8/4/2019 Transaction Value - Excise

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Normally the Excise Duty isto be paid on manufacture.But for convenience, it isallowed to be paid at the

time of removal of the finalproduct from the

factory/place ofmanufacture.

The Excise Duty has to bepaid on the Transaction

Value.


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The Transaction Value is defined asunder:-

Transaction Value means, the price actually paid

or payable for the goods, when sold, and includes inaddition to the amount charged as price, any amount

thatthe buyer is liable to pay to, or on behalf of, the

assessee,by reason of, or in connection with the sale, whetherpayable at the time of the sale or at any other time,

including, but not limited to, any amount charged for,or to

make provision for, advertising or publicity, marketingand

selling and organization expenses, storage, outwardhandling, servicing, warranty, commission or any othermatter, but does not include the amount of duty of

Excise,Sales Tax and other taxes, if any, actually paid or

actually

payable on such goods.


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The price actually paid or payable for the goods.

when sold

and includes in addition to the amount charged as price

any amount that the buyer is liable to pay to, or on behalfof, the assessee.

by reason of, or in connection with the sale

Now let us analyze theterm Transaction

Value


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Whether payable at the

time of the sale or atany other time

Including, but not limitedto, any amount charged

for

Or to make provision for

Advertising

Publicity

Marketing


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Selling and

organization expenses

Storage

Outward handling

Servicing

Warranty

Commission

Or any other matter

But does not include the amount ofduty of

Excise, Sales Tax and other taxes, ifany.

Actually paid or actually payable on

suchgoods.


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CHANGES IN EXCISE DUTYAND

SERVICE TAX RATESA) EXCISE DUTY RATES :

Sr.

No.

VALID FROM VALID TO RATE OFEXCISE DUTY

FOR ALL

EDU. CESS SHE. CESS

ON EXCISE DUTY AMOUNT

(1) (2) (3) (4) (5) (6)

1. 24.02.2009 Till date 8% 2% 1%

2. 07.12.2008 23.02.2009 10% 2% 1%

3. 01.03.2008 06.12.2008 14% 2% 1%

4. 01.04.2006 29.02.2008 16% 2% 1%


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Sr.

No.

VALID FROM VALID TO RATE OFSERVICE TAX

EDU.CESS

SHE. CESS

ON SERVICE TAXAMOUNT

(1) (2) (3) (4) (5) (6)

1. 24.02.2009 Till date 10% 2% 1%

2. 11.05.2007 23.02.2009 12% 2% 1%

3. 18.04.2006 10.05.2007 12% 2% Nil

4. 10.09.2004 17.04.2006 10% 2% Nil

5. 14.05.2003 09.09.2004 8% Nil Nil

6. 1994 13.05.2003 5% Nil Nil

B) SERVICE TAX RATES :


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Example 1 :A orders B to supply 10 quantity of goods

X @ Rs. 9,000/-each. A also asks B topack the goods in wooden boxes for which

he is ready to pay Rs. 1,000/- each box.

Then according to the terms and definition of

Transaction value, Bs invoice will be asunder :


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Consignee Auantity Each(Rs.) Tr. Value(Rs.)

Supply of X goods 10 nos 9,000/- 90,000/-

Add : Packing Charges 10 Boxes 1,000/- 10,000/-Sub Total 1,00,000/-Excise Duty @ 8% 8,000/-

Ed. Cess @2% 160/-

SHE Cess @1% 80/-

Total 1,08,240/-


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Example 2 :M/s. Ashok and Sons at Paharpur, M.P. ordered 20

nos Bajaj Pulsur Motor Bikes to Bajaj Auto Limited,

Pune @ Rs. 50,000/-each. They also asked Bajaj to

paint the Bike with special Silver colour for which

they agreed to pay Rs. 4,000/- each. They also

requested Bajaj to make an advertisement inNewspaper giving their name at Paharpur as

Authorised Dealer. Bajaj informed them that they

will have to pay Rs. 20,000/- towards advertisementcharges, then the Excise invoice prepared by M/s.

Bajaj Auto Limited, Pune will be as under :-


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Excise Invoice No. : B 109April 21, 2009

Consignee : M/s. Ashok and Sons, Paharpur, M.P.Quantity Each (Rs.) Tr. Value (Rs.)

Supply of Bajaj Pulsar Motor

Bikes

20 nos 50,000/- 10,00,000/-

Add : Special Paint 20 nos 4,000/- 80,000/-Add : Advertisement Charges 20,000/-Add : Packing 20 nos 5,000/- 1,00,000/-Sub Total 12,00,000/-Excise Duty @ 8% 96,000/-

Ed. Cess @2% 1,920/-

SHE Cess @1% 960/-

Total 12,99,880/-


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Example 3 :Suresh & Company orders Bharat ChemicalsLimited to supply Chemical Y. The quantity

ordered is 1,000 litres @ Rs. 200/- per litre.

Further Suresh & Co. also asked for 10%

discount on the sales value. Now the excise

invoice of Bharat Chemicals will be as under :


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Quantity Each(Rs.)

Tr. Value

(Rs.)

Supply of Chemical Y 1,000litres

200/- /litre

2,00,000/-

Less : 10% discount 20,000/-

Sub Total 1,80,000/-

Add : InspectionCharges

20,000/-

Sub Total 2,00,000/-

Excise Duty @ 8% 16,000/-

Ed. Cess @2% 320/-

SHE Cess @1% 160/-

Total 2,16,480/-


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Suppose a Company wants to pay dutyonly on basic price and with mutual

understanding a separate commercial billor debut note is raised for all extracharges like packing, painting,advertisement, inspection, etc. Then what

will be the position of the Company doingso?

*****


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transaction value - excise

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