Dear Expert,
We are selling excise able goods on contract basis to one company. Freight on dispatches is paid by selling company. In consideration the said company reimbursing to selling company towards freight on fixed rare basis as decided in agreement for example ₹5/- per kg. The selling company booked the freight received as freight income.
Query is whether excise duty on differential amount of freight i.e freight received minus freight paid per kg or on full value of freight income booked relating to excise able items to be paid. We are not getting any cenvat and paying duty at the rate of 2.06 percent only.
Regards,
WADHWA
Excise Duty on Freight Charges: Clarification Under Rule 5 of Central Excise Valuation Rules Explained A query was raised regarding the excise duty on freight charges for excisable goods sold on a contract basis. The selling company pays the freight and is reimbursed by the buyer at a fixed rate, booking the reimbursement as freight income. The question was whether excise duty should be paid on the differential freight amount or the full freight income. The response clarified that under Rule 5 of the Central Excise Valuation Rules, if goods are sold at a place other than the factory gate, freight charges need not be included in the transaction value unless included in the price or not separately shown in the invoice. (AI Summary)
TaxTMI 
TaxTMI 
TaxTMI 
