Excise Duty on MRP

[A Wilson]

Dear Experts,

Product MRP - ₹ 100

Abatement - 30%

Selling Price @ factory to Retail Dealer - ₹ 80/-

Pls advice whether

• Excise Duty Payable on Rs.70 (After abatement of 30% on MRP ) or
• Excise Duty Payable on ₹ 80 ( Factory Gate Price)

Thanks,

A.Wilson

[Rajagopalan Ranganathan]

Sir,

If you sell the product at the MRP declared on the package then you have to pay duty on ₹ 70/-. If you sell the same product in bulk to industrial consumers at the factory gate then the valuation has to adopted under Section 4 of CEA, 1944 and not under Section 4A of CEA, 1944.

[Ganeshan Kalyani]

Either of the provison is applicable. It is optional . Either to pay ED on transaction value or on MRP value.

[A Wilson]

Thanks You Sirs for your kind & immediate reply.

Can you share any Rule/Circular/Notification to pay duty at our Option either U/s.4(Normal Transaction Value) or 4A(MRP based).

A.Wilson

[Ganeshan Kalyani]

Please go through the following provision

Section 4	:	Valuation of Excisable goods for purposes of charging of duty of excise
Section 4A	:	Valuation of excisable goods with reference to retail sale price.

[A Wilson]

Dear Sir,

Thank You. Could you highlight the optional duty payment provision for MRP applicable products as i am unable to found the optional provision.

Thanks

A.Wilson

[Ganeshan Kalyani]

Sri Rajagopalan Sir's reply need to be referred by you in addition to the provision cited in my reply.

[YAGAY and SUN]

There are no such provisions exist in the Central Excise Law to pay the duty optionally.

[A Wilson]

Thank You all for your valuable replies

AI Summary

Excise duty valuation: duty assessed on MRP with abatement when sold at retail, otherwise on factory transaction value.
Valuation depends on sale context: if goods are sold at declared MRP to consumers, duty is computed with reference to the retail sale price (MRP) after abatement; if sold at factory gate in bulk to trade or industrial buyers, valuation is determined on the transaction (factory) value and not by retail-price reference.