ED and CST on Insurance

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..... ED and CST on Insurance
Query (Issue) Started By: - ramesh babu Dated:- 23-7-2011 Last Reply Date:- 26-7-2011 Other Topics
Got 4 Replies
Indian Laws
We are a manufacturing Industry. We normally bill the machinery for the basic value + ED 10.3% and CST 2% against Form C. The Insurance for the machine is to the account of the buyer. He will arrange for the insurance. Sometimes it happ .....

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..... ens that the buyer informs us to insure the machinery and show the insurance cost in the Sale Invoice. Now we have a taken a open transit insurance policy because the no. of cases have increased. We show the insurance component separately in the Sale Invoice and the ED 10.3% and CST 2% is calculated on the Insurance also in the Sale Invoice. But we have received complaints from the buyers that t .....

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..... he duty and tax should not be charged on the Insurance component. Are we to accept the customers words and not charge duty and tax. So clarify to me whether we should charge the duty and tax or should we not. Regards..... Ramesh Babu R Reply By pradeep khatri: The Reply: Excise Duty and CST will not be charged on the Insurance components, if shown separately in the invoice. Further, you can r .....

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..... efer Accurate meter case in this matter, though it pertains to inclusion of freight in the assessable value of the goods but may be useful in this case also. Reply By Anil Gagneja: The Reply: Excise Duty and CST charge on the insurance amount if their is an additional consideration. i.e insurance amount charged by you is greater than the . premium paid by you. Reply By shivanand tandsi: The Re .....

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..... ply: Dear All Insurance component has be suffer ED and Tax Becoz Taxes and Duty are charged on Ass.Value of goods Shivanand Tax consultant- 9845906798 Reply By LUKESH KUMAR: The Reply: Dear, As per Rule 5 of the valuation Rules , the cost of insurance is a part of cost of freight. As per Rule 5 Freight is not includible in assessable value for the purpose of excise Duty. Therefore it is .....

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..... not includible.
Discussion Forum - Knowledge Sharing .....

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