what value we need to show for Free of Cost Products in Excise Invoice.

[Rambabu Dompaka]

Respected Sir,

We are dealing with excisable products.Recently, we announced that, if the customer purchased 2 of product 'X' we will give 1 of Product Y as free of cost.Both the products are excisable.Now, my doubt is how we need to show the 'Free of cost material' in Excise Invoice. We must pay excise duty on Product Y but its value zero in Invoice.

Please guide us.

Thanks in Advance.

Regards,

Rambabu.D

AI Summary

Guidance on Excise Duty Calculation for Free Products in Promotions: Cost + 10% Method Explained A company dealing with excisable products sought advice on how to display free-of-cost products in an excise invoice. They offer a promotion where purchasing two units of Product X grants one unit of Product Y for free, both of which are excisable. The concern was how to account for Product Y, which has no invoice value, yet requires excise duty payment. One response suggested using Cost + 10% for calculating duty. Another advised showing the assessable value for all units, ensuring it covers the inputs' cenvat value. The company confirmed they generate an internal document for the free product, charging excise duty on 110% of the cost.