NCCD ON Tobacco Products in GST Regime- on MRP or Transaction Value

[BHAGIRATH JYOTISHI]

Presently Tobacco Products [ HSN CODE 2403 99 30] are covered under GST.

In Central Excise Regime, Excise Duty was Machine based on Tobacco Products under Section 3A of CEA.

NCCD is still applicable. Should we pay on Transaction Value or MRP Value after reducing abatement?

Notification No. 49/ 2008 -C.X. ( N.T.) has still entry of our HSN CODE 2403 99 30 but that speaks about items of First Schedule to the Central Excise Tariff Act' 1985. While First Schedule has been repealed, now Fourth Schedule is there.

[KASTURI SETHI]

Extract from FAQs

Is NCCD leviable on tobacco products from 1st July, 2017? What will be the method of valuation for levy of NCCD?

• NCCD shall continue to be levied on tobacco and tobacco products at the rates as applicable prior to 1st July, 2017. • Since NCCD is a duty of excise, the valuation for the purposes of charging NCCD shall be as per the Central Excise Law read with the Valuation Rules under Central Excise Law.

Q7. What will be status of Tobacco and Tobacco products under the GST regime?

Ans. Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products.

[KASTURI SETHI]

As MRP includes all taxes, you cannot charge over and above of MRP.

[BHAGIRATH JYOTISHI]

Dear Sir,

We know about FAQ but my question starts thereafter.

Whether we pay NCCD on transaction value which is being charged for GST pupose or we should pay NCCD on MRP Valuation ( after reducing abatement)?

As the product is in Schedule IV and Notification No. 49/2008 CE ( NT) also have the entry of our product as abatment but it talks about FIRST SCHEDULE ITEMS WHICH has been repealed.

We need reply on which value NCCD is required to be paid today?

[KASTURI SETHI]

Dear Querist, NCCD is payable on transaction value.

[KASTURI SETHI]

For tobacco products, Petrol, Diesel etc. valuation has to be determined under Central Excise Act read with Valuation Rules. For valuation purpose, GST Act does not come into picture.

Notification No.49/2008-CX.(NT) is concerned with Central Excise Act . Goods mentioned in Fourth Schedule to Central Excise Tariff Act, 1985 attract CE duty as perSection 3 of Central Excise Act.

[rajkumar shukla]

@kasturiji pl clarify my doubt.

Although notification under section 3A has been rescinded, section 4A is still in operation .so while tobacco is still under excise duty why can"t the MRP provision apply. Why transactional value when section 4A overrides section 4.?

[KASTURI SETHI]

Sh.Shukla Ji, .Sir,. What I wanted to say the party cannot charge NCCD on MRP. NCCD is leviable on the value to be arrived at after allowing applicable abatement from MRP. Since the querist was asking Whether NCCD on MRP or transactional Value, I used the word 'transaction value'. Actually NCCD is on abated value. The word, 'Transactional' is superfluous here, especially when we talk of MRP. Main issue was whether NCCD on MRP or abated value. The querist should have phrased his query like this. 'Transactional' should not have come into the query itself. Both cannot co-exist.

[rajkumar shukla]

Thanks.

[Arvind Sahu]

श्री मान जी nccd का कोई किलियेर नोटिफिकेशन नही आया है कि nccd लगना है या नही लगना है अगर लगना हैं तो पहले mrp पर लगता था इस लिए mrp पर लगना चाहिए ।

Qus-अगर वैल्यू पर लगना है तो स्पष्ट समझाइये।आप सभी का आभार होगा.।

[KASTURI SETHI]

MRP includes all taxes. No amount above declared MRP can be charged. MRP minus abatement = Assessable Value on which NCCD is to be charged.There is no need of separate notification because for the purpose of levy and collection of NCCD Central Excise Act still remains in force.

Read the following for further clarification:-

A 'National Calamity Contingent Duty' (NCCD) has been imposed vide section 136 of Finance Act, 2001 [clause 129 of Finance Bill, 2001, w.e.f. 1.3.2001]

The National Calamity duty chargeable on the goods specified in the Seventh Schedule shall be in addition to any other duties of excise chargeable on such goods under the Central Excise Act, 1944 (1 of 1944) or any other law for the time being in force.

The provisions of the Central Excise Act, 1944 (1 of 1944) and the rules made thereunder apply in relation to the levy and collection of the National Calamity duty leviable under this section in respect of the goods specified in the Seventh Schedule as they apply in relation to the levy and collection of the duties of excise on such goods under that Act or those rules, as the case may be.Amendments proposed in the Central Excise Act, to specify that Excise Duty would be applicable only on goods specified in the Fourth Schedule. All products other than Petroleum and Tobacco are proposed to be subsumed under GST. The Fourth Schedule contains tariff items related to Tobacco products, Cigarettes and Petroleum products

Although excise duty continues to be made applicable on the aforementioned products (to be subsumed under GST at a later date), the Fourth Schedule iincludes various goods which would attract GST. The provisions of 'deemed manufacture' under the Excise Act would only apply to tariff entries related to cigarettes, chewing tobacco and pan masala, including certain other products mentioned in the 'notes' to the Fourth Schedule. All other tariff entries appearing in the existing Third Schedule (relating to 'deemed manufacturing') have been deleted.

Section 3B and Section 3C have been inserted in the Excise Act, to provide emergency powers to Central Government to increase the excise duty.

[Arvind Sahu]

श्री मान जी nccd Notification no.49/2008-central excise (n.t) 50%, Notification no.9/2010 central excise (n.t) 55%,retail sale price से 55% घटा कर 10% लगता है

उद्धरण:-किसी समान price 100 रुपये है। 55%घटाया। 45 रुपया बचा। 10%nccd 4.50 रुपये टैक्स बना यह नियम अगर अब नही है तो इसका कोई notification या स्पस्ट समझाइये की यह नियम अब क्यो नही लागू होगा श्री मान जी आप का आभार होगा

 

[KASTURI SETHI]

Dear Second Sahu Ji,. I am incompetent to satisfy you.

[KASTURI SETHI]

Pl.read Arvind.

[rajkumar shukla]

Where is the confusion ?NCCD is still applicable.

AI Summary

Debate Clarifies NCCD on Tobacco: Calculated on MRP Minus Abatement, Not Transaction Value, Under GST Regime The discussion revolves around the application of the National Calamity Contingent Duty (NCCD) on tobacco products under the GST regime. Participants debate whether NCCD should be calculated based on the Maximum Retail Price (MRP) minus abatement or on the transaction value. It is clarified that NCCD should be levied on the abated value from MRP, not the transaction value. The Central Excise Act and its valuation rules remain applicable for NCCD, despite changes in schedules and the introduction of GST. The conversation highlights confusion over the applicable rules and the need for clarity in regulatory notifications.