Excise Duty Liability on FOC Value PO Rate increase recd from Previous Period

[Rahul Patel]

Sir,

we have received Rate difference from our Customer PO Rate is increased from April'13 to Dec'13, we have paid differential excise duty & interest on rate increase amount.

at the time of dispatch of finished goods we have paid excise duty on PO Value + FOC Value + Tooling Amortization & Royalty percent add on (PO Value + FOC Value + Tooling Amortization) as per excise valuation rules.

my query is:

Excise Duty is payable at the time of received of rate increase is payable on.

1- Rate difference received from our Customer Or

2- Rate difference Received + (FOC Value + Tooling Amortization + Royalty percent )

Please guide us in this matter.

Regards,

Rahul Patel

AI Summary

Excise Duty Dilemma: Rate Increase Alone or Include FOC, Tooling, Royalty? Insights from Central Excise Valuation Rules A query was raised regarding the excise duty liability on a rate increase received for a purchase order from April to December 2013. The issue was whether excise duty should be paid on the rate difference alone or include additional values like FOC, tooling amortization, and royalty. An indirect tax consultant advised choosing the second option, aligning with Central Excise Valuation Rules. Another respondent suggested the duty should be on the rate difference, adding the royalty percentage, unless the rate differential is minor, in which case the second option might be preferable to avoid litigation.