amortization cost is applicable on foc sale

[sagar shekhar]

dear sir,

i have send some part on FOC invoice to our customer can you please confirm amortization is applicable or not

[YAGAY and SUN]

Yes, it is applicable. Since Excise duty is on removal, not on sales of goods.

[PARTHASARATHY V]

When the Mould, Dies or other products provided to manufacture of agreed product, which will cover under the Valuation Rule 6 of 2006 ( which includes technical drawing, kowhow etc). Clearance made from supplier must suffer excise duty, whether it is for sale or FOC. Excise duty to be charged along with amortization cost for the goods cleared.

AI Summary

Amortization cost applicability: amortization must be included in excise valuation and charged on free-of-cost clearances.
Amortization cost must be included in the assessable value for excise where moulds, dies or related technical inputs cleared to a customer-including free of cost supplies-fall within the valuation rule for such inputs; excise duty is leviable on removal and such clearances must be charged to duty with amortization added to the taxable value.