Levy of NCCD

[Amresh kumar]

Sir/madam,

There were some conflicting views and judgments regarding levy of NCCD in post GST regime as there was no excise duty.

Govt in the budget 2018 inserted a nominal excise duty by claiming that as a practice since no NCCD was being paid by some.

Wether the assessee has to pay NCCD from July 2017 or from 2018 when it was inserted.

Since it was a practice prevalent can the assessee be benefited by this. Since Finance Minister speech clearly says about it.

Regards

Amresh Kumar

[KASTURI SETHI]

Still NCCD is leviable on selected products. NCCD is exempted only if Central Excise duty is exempted on any product.

Have you perused the judgements of Supreme court in the case of HERO MOTOCORP LTD. reported as 2019 (366) E.L.T. 807 (S.C.) = 2019 (6) TMI 762 - SUPREME COURT and in the case Bajaj Auto Ltd. reported as 2019 (366) E.L.T. 577 (S.C.) = 2019 (3) TMI 1427 - SUPREME COURT ?

Q. Wether the assessee has to pay NCCD from July 2017 or from 2018 when it was inserted ?

Ans. Yes.

What was the speech of Finance Minister on NCCD ? Do you think speech has statutory force ? Finance Minister's speech is to be followed by notification.

[Amresh kumar]

Sir,

That means no NCCD would be applicable before it was inserted in budget 2019 at ₹ 5 /1000.

Wet July 17 to January 19 no NCCD can be charged.

But based on instructions from the Board the dept is recording and issuing SCN even for the period July 17 onwards.

[KASTURI SETHI]

The department's view is correct. All my clients dealing in tobacco products are paying NCCD under GST regime. They were also paying NCCD in pre-GST era. No break between pre-GST era and post-GST regime. What is your product ?

[Amresh kumar]

Sir,

Product is cigarettes.

[KASTURI SETHI]

Cigarette is a tobacco product. NCCD is applicable. On tobacco products Central Excise duty and GST both are leviable. My clients manufacture snuff and they are paying NCCD. They have not discontinued NCCD after implementation of GST. All manufacturers of tobacco products are paying NCCD.

[CABIJENDERKUMAR BANSAL]

DEAR SIR

The Section 136(1) of Finance Act 2001 imposes the NCCD on the tobacco products where excise duty is paid.

Thanks

[KASTURI SETHI]

Yes.I agree with you.

[Sandeep Dutt]

Dear sir

Can you please explain the calculation of BED, NCCD, Compensation Cess and GST on a chewing tobacco product having MRP. 100/- RS.

[KASTURI SETHI]

Dear Sandeep Dutt,

You know MRP includes all taxes and profit. I am taking only these components as I am not aware of other components/elements, if any.

Suppose MRP of chewing tobacco is ₹ 100/- (You cannot go beyond this price while selling). To arrive at taxable value we must know the rates of duty/GST/Comp.Cess.

1.GST 28%

2. BED : 0.5 %

3. Compensation Cess { 81 %

4. NCCD :25%

5. Profit 10 % (Presumption)

Total duty/tax : 144.50 %

Taxable Value : ₹ 69.21 (Approximate)

MRP : ₹ 100/- (Rounded off).

Pl. Check and let me know your purpose is solved or not.

[Sandeep Dutt]

Dear Kasturi ji,

I basically want to know how the different taxes will be charged and on what value of MRP 100 Rs... Which taxes or cess will be charged on abated value and otherwise... And how to arrive at taxable value for each duty and cess...

[KASTURI SETHI]

Dear Sandeep Dutt,

I have computed the assessable value on the basis of MRP of ₹ 100/- which is assumed. Pl. let me know what is actual MRP of your product and I shall guide how to calculate either on this forum or through email. If you want to email, you can. No fee will be charged. I do not charge fee for small queries.

AI Summary

NCCD applicability on tobacco products continues post GST, requiring levy despite legislative insertion timing and departmental SCNs. Levy of NCCD continues to apply to selected tobacco products in the post GST regime where Central Excise duty is payable; exemption from excise removes NCCD liability. Departmental practice indicates continuous levy from the post GST transition period despite debate over whether NCCD became payable only after a later budgetary insertion, and the Finance Minister's speech is not itself statutory authority. The forum also outlines an illustrative method to compute assessable value from MRP and allocate GST, Basic Excise Duty, Compensation Cess and NCCD.