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

[YAGAY andSUN]

In our view, Cost + 10% would be sufficient for calculating and paying C.E. Duty.

[Rambabu Dompaka]

Thanks for your reply sir.

Whether we need to show that portion in Excise invoice ?

Regards,

Rambabu.D

[Laxmikant Khandayataray]

Your offer is buy two get one free which means you are charging price of 3 against 2.So what ever may be your excise invoice would be showing number of units cleared with assessable value which should not be less than assessable value of cenvat taken for the used inputs for those 3 units cleared.If you are following this procedure then no worry for excise.

Laxmikant

[Rambabu Dompaka]

Thanks for your reply sir.

Yes, we are generating another internal document for Free of cost material, in that we are charging ED on 110% cost and remitting to dept.

Regards,

Rambabu.D

AI Summary

Assessable value for free goods must reflect a notional price so excise duty is calculated and remitted appropriately. Valuation of free-of-cost excisable goods requires declaring a notional assessable value and remitting excise duty on that value; suggestions include charging a margin on cost to compute the assessable value and ensuring the declared value is not less than the assessable value corresponding to cenvat taken on inputs for the units cleared, with internal documentation maintained for such free supplies.