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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