duty calculation

[Dalia Felix]

we manufacture certain goods belonging to Chapter 16 of CETA. The goods are not seen in Third Schedule to CETA. An abatement of 35 % is declared in the abatement notification. the goods are packed and cleared in 'unit containers'. How the excise duty is to be calculated? based on MRP or on transaction value?

[PAWAN KUMAR]

Dear Sir,

Duty is to be calculated on MRP. As per your statement, there is an abatement of 35%. For example : If MRP is ₹ 100/-, Less abatement of 35% i.e. ₹ 35/-, Net assessable value would be ₹ 65/- on which duty is to be charged @ 12.36%.

[PAWAN KUMAR]

Dear Sir,

As you are manufacturing goods packing them in unit container. As per my view, both the options are available. If you are putting MRP on each container and it is your final price, then MRP based assessment will apply according to S.No.110 of Noti.No.49/2008-CE (NT) dt. 24.12.2008 as amended. This is irrelevant that your product is not under third schedule. The rate would be MRP - less abatement = assessable value of goods on which 6.18% rate of duty apply.

If you opt for transaction value of your unit container as final price, 6.18% of such value would be the rate of duty.

AI Summary

MRP-based assessment permits duty on net assessable value after authorised abatement; transaction-value option remains available.
For goods packed in unit containers with a declared 35% abatement, duty may be assessed on MRP where MRP is printed on each container and is the final price: assessable value = MRP less 35% abatement and duty is charged on that net value. Alternatively, if the manufacturer elects transaction value of the unit container as the final price, duty is charged on that transaction value at the applicable rate.