Applicable excise duty in case of relocation of Fixed Assets

[Bhairob Chandra Bor]

Dear Expart,

we are under the preparation of transfer of all Movable fixed assets to a new location. New location is 200 meters away from the old one but excise registration is different. A single Books of accounts is maintain. what should be the transaction value of exercisable fixed assets to be transferred to the new location. these includes of assets for more than 18 years but WDV is nil. kindly advice for the transaction value to be considered for paying the excise duty:

1. where WDV is nil

2. where WDV has some value.

kindly also advice for the separate rates is applicable as per excise laws to be used for calculating the transaction value.

[YAGAY andSUN]

Dear Bhairob,

Where WDV is nil:- You may have two options on this matter.

1. You may get a certificate from Top Management or Chartered Engineer or Certified assessor to evaluate the value for removal of capital goods;
2. You may adopt the value on which you are getting the insurance cover for such machinery or fixed asset.

Where WDV has some value: - You may adopt the formula of deduction of 2.5%.

For details, please check the Rule 3(5) and including sub rules and proviso of the CENVAT credit 2004 as amended from time to time.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

[Mahir S]

In your case, there appears to be no need to pay any duty for assets so old. The same can be removed on excise invoice without payment of duty by mentioning the transfer details thereon or on a Challan with non-returnable gate passes.

However, prior intimation to the excise department before removal of such goods is must.

Valuation, if required, can be made as explained above and if not required, then no need to mention the transaction value.

AI Summary

Excise Duty Query: Moving Old Assets with Nil WDV to New Registration Site; Experts Offer Valuation and Notification Tips. A query was raised regarding the excise duty applicable on relocating movable fixed assets to a new location with a different excise registration. The assets, over 18 years old, have a written-down value (WDV) of nil. One expert suggested obtaining a valuation certificate or using insurance value for assets with nil WDV, and applying a 2.5% deduction formula for assets with some WDV. Another expert advised that no duty might be needed for such old assets, suggesting removal on an excise invoice or Challan, with prior notification to the excise department.