CAS - 04 - G Note - GUIDANCE NOTE ON COST ACCOUNTING STANDARD ON COST OF PRODUCTION FOR CAPTIVE CONSUMPTION (CAS-4) - (Revised)

Valuation for captive consumption requires assessable value as a markup over CAS 4 cost of production with prescribed cost components.

Guidance requires that assessable value of excisable goods used for captive consumption be determined by applying the Central Excise Valuation Rules to a cost base computed strictly under CAS 4. Cost of Production under CAS 4 comprises material consumed, direct wages and salaries, direct expenses, works overheads, quality control cost, research and development cost, packing cost and administrative overheads relating to production, adjusted for opening/closing stocks, recoveries from scrap or by products, inputs received free, and amortisation of moulds/tools; interest, financial charges and abnormal non recurring costs are excluded. Overheads must be classified and absorbed on consistent capacity bases, and costs presented in a product wise cost sheet verified and certified by a cost professional.