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Tooling procedure , Central Excise

Issue Id: - 3646
Dated: 14-12-2011
By:- Mridul Sethi

Tooling procedure


  • Contents

Pls clear me the tooling procedure in excise, how we calculate the perunit toolcost & how charge in bills...Mridul

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Showing Replies 1 to 2 of 2 Records

Page: 1


1 Dated: 15-12-2011
By:- r.rajkumar kumar

your question is not very clear. but i understand if your customer pays seprately for tool, to produce

the goods .you have to amoritize the tooling cost and chage excise for the amortize cost  and duduct the

amortize cost while sending the bill to the cusomer. since tools cost has already paid in advnace to produce the final goods . for amortization cost pl calcualte the cost takeing the life of the tools ,and no of the goods can be produced by the tools . this can be costed by cost account or yourself. This is according to the valucation rules of central excise act 2000.tks


2 Dated: 15-12-2011
By:- Pradeep Khatri
Amortisation of tooling cost supplied by buyer is required to be includibe for Central Excise Valuation.
In central excise, if the buyer has supplied toolings, its cost has to be amortised and included in assessable value
for the purpose of calculation of central excise duty.      
Exhibit: -      
Calculation of Amortisation cost Rs.      
Gross Value of capital Goods (say)   500,000.00      
Inputs/shots expected   100,000.00      
Amortisation cost per piece to be added in assessable value for calculation of excise duty              5.00      
Description Rate of  Tax Ass. Value only for Calculation of Excise Duty Invoice Value chargable by supplier to customer
Price charged by the supplier for Input 'X'                             45.00                     45.00
Add: - Amortisatio cost of Machine (per piece of Input)                             5.00                           -  
Assessable value under Section 4 of the Act                           50.00                     45.00
Excise duty       10.30%                           5.15                       5.15
Taxable Amount for charging of VAT/CST (as the case may be)                                -                       50.15
VAT @ 5%        5%                              -                         2.51
          Total Invoice Value                     52.66
Amortisation of tooling cost supplied by buyer not includible for sales tax valuation -
Further, In Morioku UT India v. State of UP (2008) 224 ELT 365 =15 VST 559 (SC), it has been held that
there is no similar provision of adding cost of additional consideration in UP Trade Tax Act and hence
such cost is not to be addible.        
Pict            

Page: 1

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