Valuation under Excise

[Arti Gupta]

We have done some repair work under warranty period which is amount to manufacture. We have to supply it free of cost to our customer.

Please explain on what value we have to pay excise duty? Whether only on material value or on material + labour + other overheads or any other value.

Please clarify. Thanks

[YAGAY and SUN]

Follow the Rule 8 of the valuation rule i.e. Cost + 10 percent .

AI Summary

Valuation for warranty repairs: excise duty assessed on cost plus markup, covering materials, labour and overheads.
Valuation for excise on warranty repairs treated as manufacture is to be determined on a cost-plus basis: compute the cost of manufacture including materials, labour and overheads and add the prescribed margin (noted in the source as Cost + 10 percent) to arrive at the assessable value for excise duty on goods supplied free under warranty.