Valuation of Sales Return

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..... Valuation of Sales Return
Query (Issue) Started By: - JOHN SHANNEL Dated:- 24-1-2011 Last Reply Date:- 24-1-2011 Income Tax
Got 3 Replies
Income Tax
Ours is a snacks co. The Sales returns is almost 4% of our sale. Our Price list for our products keeps on changing atleast once in a month. We receive sales returns from our distributors. We value our stocks approximately since we do not .....

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..... have any record on which price it is sold. Is it right. Is there any case law. Reply By Mangesh Lokre: The Reply: Dear Mr John For Sales Return, the detail guideline are given in Rul 16 of Cntral Excise Rules 2002. 1. You have to kept the Sale Return in separate identified are and after receipt you have to intimate to the Jurisdictional Excise Office. 2. You have to maintain separate Register .....

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..... ( Form V) for this. After receipt you have to account in this register. If the Officer doesnt inspect the sales return within 24 hr of the intimation, then the receipt goods may be transfered for reconditioning or similar activity. 3. If you have avail the Cenvat Credit on these goods, then at the time of removal the same amount of cenvat credit to be passed. 4. You may sold the goods at higher .....

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..... or lower price. If goods sold at higher price, pay the duty on the transaction value. If the goods are sold at lower price, then pass the equivalent credit which was taken at the time of receipt. Reply By JOHN SHANNEL: The Reply: Sir thanks for you reply. but the goods received are not sold infact it is of no use ( Since it is snacks) so it is destroyed. We value the goods and deduct from the .....

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..... sales. We also do not pay excise duty. Please advice on this whether there is any issues in valuation of our Sales return. Sales XXXX Less: Sales return XX Net Sale XXXX Reply By Mangesh Lokre: The Reply: Dear Mr John In our view, since these sales return are not marketable, you may ask remission of Duty Paid u/r 21 of CCR 2002. In case of replacement against these sales return, you have .....

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..... to pay the Duty as per the pervailing rate only the VAT/CST will not be applied since this is not the sale. Payment of Excise Duty is mandatory at the time of removal.
Discussion Forum - Knowledge Sharing .....

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