Excise duty on freight

[Asked by Guest]

Dear Experts

We are the manufacturer of liquid chemical and due to shortage of tankers in market ,we have made own 5-6 tankers to deliver the material to our party. Mostly we are supplying our material to govt/semi Govt. Units. According to Purchase order we are charging freight and raising freight invoice separately with the material invoice .

So we booked the transportation income in our balance sheet . Now Excise audit team audited our account and raising a quarry that transportation income is a part of your goods value and excise duty will be payable @12.36 % on Transportation income .

Please advice on this issue .

AI Summary

Inclusion of freight in assessable value: separately invoiced freight and mark ups are not part of excisable value.
Established authority holds that separately invoiced freight, including any mark up or averaged destination freight charged to customers, is not includible in the assessable value for excise duty where transportation is not a condition of sale and freight is billed distinctly; therefore transportation income booked separately should not attract excise duty.