Design and Development - New Product Delivered along with CD

[SARAVANAN RENGACHARY]

We are designing and developing printed circuit board based on the specific requirement of the customer.

Delivery:

Printed Circuit Board - 1 Qty and CD containing design of the product.

Query: please let us know applicable tax for this delivery.

[Rajagopalan Ranganathan]

Sir,

Populated, loaded or stuffed printed circuit board is classifiable under sub-heading No. 8517 70 10 of the first schedule of Central Excise Tariff Act, 1985 attracting cenvat duty @12.5%. designing and Developing such board will amount to manufacture under Section 2 (f) of Central Excise Act, 1944. Therefore such boards are subject to central excise duty. The cost of the CD containing the design of the product shall be includible in the transaction value of such boards and duty is payable on this transaction value.

[SARAVANAN RENGACHARY]

Sir,

Thanks.

AI Summary

Manufacture classification of designed printed circuit boards triggers excise duty and inclusion of design CD in transaction value. Designing and developing a populated printed circuit board constitutes manufacture and the finished board is classifiable as an excisable good, attracting central excise duty. The CD containing the product design delivered with the board forms part of the same supply; its cost must be included in the transaction value of the board for valuation and duty liability.