TMI BlogMRP Based valuation in Central ExciseX X X X Extracts X X X X X X X X Extracts X X X X ..... MRP Based valuation in Central Excise - By: - Surender Gupta - Central Excise - Dated:- 19-8-2007 - - Section 4A of Central Excise Act, 1944 provides special procedure for valuation of certain goods on which MRP is maladroitly required to be printed. Under the provision of Section 4A , central government prescribes the rate of rebate . See notification no. 02/2006 CE(NT) dated 1/3/2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The procedure of valuation of calculation of central excise duty may be understood with the following example: MRP is affixed on product "X" is Rs. 100/-. Rate of Rebate is 40% in terms of notification no. 2/2006 . Rate of Excise Duty is 16% and Cess 3% (2% + 1%). Rate of Sales Tax (VAT) is 3%. Whole sale price of the product is Rs. 65 with duties of excise and local taxes. Now for the purpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Excise duty the following steps should be taken: 1 MRP Rs. 100 2 Less Rebate @ 40% Rs. 40 3 Value on excise duty to be paid Rs. 60 4 Amount of Excise Duty of Rs. 60 Rs. 9.888 a. Basic Excise Duty @ 16% = Rs. 9.6 b. Education Cess @ 2% = Rs. 0.192 c. SH Education Cess @ 1% = Rs. 0.096 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 For the purpose of calculation of excise duty - actual sale price to be ignored. 6 Local taxes like sales tax shall be ignored 7 Any discount whether quantity discount / volume discount or performance discount shall be ignored 8 All other adjustments prescribed under section 4 shall be ignored. 9. Provisions of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise Valuation (Determination of Price of Excisable Goods) Rules, 2000 shall be ignored. - Reply By Deepak Jha as = Dear Sir, If Mrp is 100 and abatment is 30 % and selling price is ₹ 80 than excise duty will be applicable on (100-30% = 70 or excise duty will be applicable on selling price Of ₹ 80. waiting for your valuable reply Thanks Regards, Deepak Jha Dated: 18-4-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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