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TMI Blog12.5% Excise to be levied on base price or discounted priceX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sirs, I am a distributor for a multinational company Construction chemicals, They have various manufacturing locations in India In their invoice for example the basic value of a material is 2000 rupees and they are giving a discount of 50% how much excise they should charge 12.5% on 2000 (Basic price) or 12.5% on 1000 (Discounted Price) please share your feedback and any supported links ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or documents Thanking you [email protected] - Reply By KASTURI SETHI - The Reply = Discount from transaction value should be reasonable and genuine. No additional consideration directly or indirectly (or in some guise). Discount should be passed on to the independent buyers. No sale to related person. Go through Board's Circular No. 979/3/2014-CX ., dated 15-1-2014 before arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final decision. these are the precautions to be taken. CE duty can be paid on the discounted price but subject to above conditions. - Reply By Vinay Badam - The Reply = Thank you for very immediate reply sir, Actually the company is not selling at prices less than manufacturing prices, They provide different discounts based on volume of the order My question is 12.5% to be calculated on basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c price or discounted price - Reply By KASTURI SETHI - The Reply = On discounted price (Net Price). But I shall use the term, 'Transaction Value'. Duty is chargeable on the net price paid or payable in terms of Section 4 of the Central Excise Act. What I think 50% discount is too much whatever the factors may be. You will make some base with documentary evidence regarding discounted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price on which duty will be paid. After perusing my earlier reply and going through the Board's circular based on the judgement of the Apex Court, every aspect must be clear to you. - Reply By Mahir S - The Reply = Excise duty shall be payable on the discounted price that is arrived after allowing for discount on the base price. - Reply By YAGAY AND SUN - The Reply = In the case of CCE, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Indore vs Bridgestone India Pvt Ltd .= 2015 (9) TMI 981 - CESTAT NEW DELHI the assessee was selling the goods through its dealers and C F agents and was giving quantity discount / trade discount / cash discount to its dealers through credit notes at the end of year. The assessee applied the excise department for provisional assessment but the application was rejected by the department. At the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time of clearance of goods from the factory, the assessee paid the excise duty on the sale price (without deducting the discount amount) and filed a refund claim of excess excise duty paid on the finalization of the discount amount.The Tribunal allowed the deduction of different discounts given by the assessee to its dealers from the transaction value. The Tribunal relied on the Supreme Court judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments in the case of Bombay Tyre International and Madras Rubber Factory and held that where the discount policy and its basis is known prior to the clearance of goods from the factory, the deduction of the same is allowed while arriving at the transaction value for payment of excise duty. Even refund of excise duty shall be allowed in cases where the deduction of discount is not claimed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom transaction value but the policy and its basis is known to the buyer at the time of removal of goods from the factory. - Reply By KASTURI SETHI - The Reply = M/s.YAGAY AND SUN, Thanks a lot for reference of judgements, Sirs. On the basis of the judgements referred by you, the following judgement of the Apext Court is also relevant:- 2015 (323) E.L.T. 227 (S.C.) = 2015 (8) TMI 1014 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SUPREME COURT IN THE SUPREME COURT OF INDIA A.K. Sikri and Rohinton Fali Nariman, JJ. PUROLATOR INDIA LTD. Versus COMMISSIONER OF CENTRAL EXCISE, DELHI-III Civil Appeal No. 1959 of 2006, decided on 25-8-2015 - Reply By Vinay Badam - The Reply = Thanks a lot everyone for immediate and appropriate responses Thank you - Reply By Ganeshan Kalyani - The Repl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y = Nice discussion. It enriched my knowledge. - 12.5% Excise to be levied on base price or discounted price - Query Started By: - Vinay Badam Dated:- 11-1-2016 Central Excise - Got 8 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ..... X X X X Extracts X X X X X X X X Extracts X X X X
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