TMI BlogValuation of tobacco and tobacco products for the purposes of payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD)X X X X Extracts X X X X X X X X Extracts X X X X ..... alamity Contingent Duty (NCCD) -reg. Representations have been received seeking clarification on the manner of computation of valuation, after admissible abatement, for the purposes of computation and payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD). It has been argued that on calculation of excise duty and NCCD on the value arrived at after abatement on the retail sale price and thereafter computing Goods and Services Tax (GST) on such value inclusive of the excise duty and NCCD results in the total retail sale price of such tobacco and tobacco products overshooting the declared retail sale price, and accordingly, the rate of abatement is being questioned citing the increase in NCCD rates in the year 2020. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt as prescribed in section 15 of GST Act, 2017 [i.e., in the above example, Value for computation of GST and Compensation Cess V = Transaction value as per the GST Act, 2017 + 11.475 (basic excise duty +NCCD)]. Hence, consequent to an increase in NCCD rate (like in year 2020), a manufacturer of tobacco product had option to raise his retail sale price so as to retain the transaction value at a level that he wishes to recover from the consumer. Accordingly, in a regular transaction, at arm s length, the sale price of tobacco product would be value V plus GST and compensation cess. It is normally anticipated that the tax and duty increase, including excise duty and NCCD, would lead to increase in sale price. 2.2 As explained abov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no legal infirmity in notification No. 49/2008-Central Excise (N.T.) dated 24.12.2008 , as amended, in continuing with a reference to the First Schedule of the Central Excise Tariff Act, 1985 . 4. Accordingly, it is directed to ensure that the valuation of the tobacco and tobacco products, as provided under the relevant notification(s), with reference to retail sale price declared on such goods less such amount of abatement as is notified, is done for the levy and collection of the basic excise duty and NCCD on such goods, as detailed above. 5. Hindi version shall follow. (Piyush Kumar Ankit) Technical Officer (TRU-I) 01.02.2022 - Circular - Trade Notice - Public Notice - Instructions - Office orders Tax Mana ..... X X X X Extracts X X X X X X X X Extracts X X X X
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