Bottled water Product
There are 2 type of customer
- Distributors- who eventually sale product to retailers shop and then retailer sale to public for end use. Say example 1 Ltr bottle sold at ₹ 20 by retail shop to customer.
- Hotels, Caterers, Shipping Company- they use water for their on consumption to serve clients and not sale at MRP- for example hotels put bottles complimentary in rooms and don’t sale to client. Like caterers use for wedding function and serve with food. These parties are not concerned with MRP.
Scenario of packaging;
1 Ltr | 500 ml | 200 ml | 20 Ltr | |
A. Distributors | ||||
MRP per Bottle | 20 | 10 | 5 | 70 |
Basic Price | 7 | 4.5 | 3.5 | 40 |
Assessable value (A.V) 55% of MRP (as 45% is abatement) | 11 | 5.5 | 2.75 | 38.5 |
Excise duty @12.5% on AV | ||||
AV compare to Sale basic price | More | More | Less | More |
B. Hotels/Caterers | ||||
MRP per Bottle | 10 | 6 | 4 | 50 |
Basic Price | 7 | 4.5 | 3.5 | 40 |
Assessable value (A.V) 55% of MRP (as 45% is abatement) | 5.5 | 3.3 | 2.2 | 27.5 |
Excise duty @12.5% on AV |
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AV compare to Sale basic price | Less | Less | Less | Less |
Questions:
- On MRP based product – excise duty is calculated on Assessable Value (AV)- in case of LESS item, can we pay excise only on AV ? where AV is less than Basic sale price.
- Same product can we have difference MRP for distributor and Hotes/caterers as 2 category of clients.
- In case of hotel/caterer can manufacturer have lower MRP as special group of customer and then whether abetment can be applied?
- Can manufacturer do not print MRP for product sale to hotel/caterer and write “Not for Sale”- in that case how excise duty will be calculated ?