Approval of Price Lists - Deduction of equalised Sales Tax, etc. - Instructions regarding - Central Excise - 20/90-CX.1

Approval of Price Lists - Deduction of equalised Sales Tax, etc. - Instructions regarding Circular No. 20/90-CX.1 Dated 30-8-1990 [From F. No. 4/6/90-CX.1] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Approval of Price Lists - Deduction of equalised Sales Tax, etc. - Instructions regarding. I am directed to say that representations have been received from the trade regarding approval of price lists indicating the maximum retail prices in the light of Notification No. 511 dated 25-5-1990 issued by the Ministry of Civil Supplies amending the packaged commodities rules requiring that retail sales price inclusive of all local taxes, i.e., ECP should now be marked on all packed commodities. 2. In order to conform to the amendment that had been carried out in the packaged commodities rules requiring the marking of the retail prices inclusive of local taxes, the trade have represented that, to ensure a uniform retail price all over the country, it would be necessary for them to equalise all local taxes, octroi etc. and get the assessable values approved accordingly for the purpose of Central Excise levies. As rates of sales tax and octroi vary from state to state, the trade may face difficulty in getting the assessable values approved for different states. In order to overcome this difficulty, the trade have come up with a request to the Ministry to devise suitable procedure for approving the assessable values from the maximum retail prices inclusive of all taxes that may be indicated in the price lists. 3. The matter has been examined by the Board. As per Section 4(4) (d) (ii) of the Central Excises Salt Act, 1944, 'value' in relation to any excisable goods does not include the amount of the duty of the excise, sales tax and other taxes, if any, payable on such goods and, subject to such rules as may be made, the trade discount (such discount not being refundable on any account whatsoever) allowed in accordance with the normal practice of the wholesale trade at the time of removal in respect of such goods sold or contracted for sale therefore, as per these provisions, the value for the purpose of Central Excise does not include, inter alia, taxes also. At present, the practice of deducting equalised freight from cum duty price is in existence as per the Supreme Court judgment in Bombay Tyres International case. On the same lines, assessees who intend to deduct equalised sales taxes, octroi etc. from the cum duty price may be permitted to do so on the condition that such deductions are substantiated, from time to time, on the basis of information available in records regarding the actual amounts paid as taxes, octroi, etc. As long as the assessable values claimed are correct and are not manipulated in order to avoid duty, it is felt that the assessing authorities may allow deductions on account of sales tax, octroi etc. on equalised basis. Any practical difficulties encountered in this regard may be reported to the Board. 4. Field formations and trade interest may be informed suitably.