Disposal of Asset As a scrap

[Guest]

Dear Sir,

We disposed our old unused assets as a scrap and we remove this assets from our books of accounts.

So we need to pay excise how much sale value we received from scrap sales or we calculate reduce 2.5 % per quarter and than we pay the duty accordingly which one is correct method in above case ?

Regards

Swapneswar Muduli

[KASTURI SETHI]

Transaction Value is correct.

[Suryanarayana Sathineni]

Dear Friend,

I endorse the view of Shri. Kasturi Sethi Ji while giving a small advise as an abundant caution that please ensure mentioning in the clearance invoice after the item name ( Scrap ) or write as as a prefix Scrapped to the item name.

Best Regards

Suryanarayana

[KASTURI SETHI]

Sh.Surya Narayana Ji,

Thanks Sir for correctly completing my reply.

[Ganeshan Kalyani]

Thanks to experts. It enriched my knowledge. Thanks.

AI Summary

Transaction value governs excise duty on scrapped asset sales; clearly label invoices to reflect scrap nature. Disposal of obsolete assets as scrap is subject to excise duty based on the transaction value - the actual sale proceeds realised - rather than a valuation computed by applying a periodic depreciation percentage; invoices should expressly describe the goods as 'scrap' or 'scrapped' to document the nature of the sale.