Differential of Excise duty

[RAM SHARMA]

Dear Experts,

We are registered manufacturer in central excise. We are sold our product through our Depot/Consignment agent. Suppose we have removed our product at the rate of 10 percent excise duty from the factory in fy 2011-12. Now from March 2012 the rate of excise duty is at the rate of 12 percent . What will be the excise duty rate applicable for our consignment agent/Depot. Whether differential duty will be applicable on the factory after the effective rate of change. Pl advice.

Thanks

[Rajesh Nathoo]

Dear Mr. sharma ,

Point of taxation in Central excise is removal from factory . Rate of duty applicable would be when goods are removed from the factory . Depo sale is not an exception to this. Depo value is relevant only for valuation purposes.  So rate of duty applicable in this case will be 10 percent . . There is no need to pay the differential duty in this case .

AI Summary

Point of taxation determines excise rate: rate at removal governs consignment or depot sales, so no differential duty applies. Point of taxation under central excise is the removal from the factory, and the excise duty rate applicable is the rate at removal. Depot or consignment sales are not a separate point of taxation, and valuation for depot transactions does not change the rate determined at removal; therefore no differential duty arises when the rate increases after factory removal.