12.5% Excise to be levied on base price or discounted price

[Vinay Badam]

Dear Sirs,

I am a distributor for a multinational company Construction chemicals, They have various manufacturing locations in India

In their invoice for example the basic value of a material is 2000 rupees and they are giving a discount of 50%

how much excise they should charge

12.5% on 2000 (Basic price)

or 12.5% on 1000 (Discounted Price)

please share your feedback and any supported links or documents

Thanking you

[email protected]

AI Summary

Excise Duty on Construction Chemicals: Calculate on Discounted Price, Not Base Price, Says Legal Consensus A distributor for a multinational construction chemicals company inquired about whether a 12.5% excise duty should be levied on the base price or the discounted price of a product. The consensus among forum participants, referencing legal precedents and a Board's Circular, was that excise duty should be calculated on the discounted price, also referred to as the transaction value. It was emphasized that discounts must be genuine and documented, with no sales to related parties. The discussion included references to relevant legal cases and judgments supporting the deduction of discounts from the transaction value for excise duty calculations.