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TMI BlogDetermination of assessable value for levy of excise duty where an incentive is provided by the State Govts. in the form of retention of Sales-tax by the manufacturersX X X X Extracts X X X X X X X X Extracts X X X X ..... n and exclusion of sales-tax in the assessable value. The trade has raised a doubt about the deductions given in respect of sales tax leviable by State Government, while determining the Assessable value. The following three situations arise as a result of incentive schemes formulated by some of the State Governments for ensuring rapid industrialisation in the backward areas of the states:- i) Exemption from payment of sales tax for a particular period; ii) Deferment of payment of sales tax for a particular period; iii) Grant of incentive equivalent to sales tax payable by the units. 2. The matter regarding the above three situations has been examined by the Board in consultation with Ministry of Law. 3. In category of cases ment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise duty in terms of Sec. 4 of the Central Excise Act, 1944 (Act for short). 2. The following three situations arising as a result of incentive scheme formulated by some of the State Government for ensuring rapid industrialisation in the backward areas of the states have been mentioned:- (i) Exemption from payment of sales tax for a particular period; (ii) Payment of sales tax deferred for a particular period; and (iii) Grant of incentive equivalent to sales the payable by the units. 3. Section 4 of the Act is regarding valuation of excisable goods for the purposes of charging of duty of excise. Clause 4(d)(ii) of Section 4 provides, inter alis, that the amount of sales fax and other taxes, if any, payable on excisable goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give an indication that sales tax in payable by the assessee in both the situations. It is after a particular period in the second case. On the other hand, in the third situation, the sales tax is considered payable by the assessee even though it is paid by the State Government, the assessee keeping the said amount as cash incentive. In this situation sales tax would be considered as payable within the meaning of the provisions of Sec. 4(4)(d)(ii) of the Act. 7. We are therefore, of the opinion that in the category of cases mentioned in Para 2(i), sales tax is not deductable whereas in the category of cases mentioned at (ii) and (iii) sales tax is deductable from the wholesale price for determination of assessable value under Sec. 4 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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