TaxTMI 
TaxTMI 
We have received an order for making of Die's from a customer of Austria. The customer will pay die cost in foreign currency. The above customer is asking from us to supply the cmponent from the above die to their supplier of India i.e. we have to supply the component to his supplier on form ARE-3. Whether we can raise commericial invoice to customer of Austria and retain the die with us for production to give supplies to his supplier in India on form ARE-3. Whether Excise Duty has to be charge on issuing invoice of Die. Also whether we have to amortize die cost on supplies.
Commercial invoice - chargiability of excise duty
11 Jun 2009 
3 Replies 
1965 Views Asked by
Amortisation of die cost affects assessable value and can trigger excise duty unless captive consumption exemption applies.
Die cost should generally be amortised into the assessable value and excise duty charged on that value, with separate assessable-value calculations for excise and sale purposes; however, where dies are retained and used for manufacture of components destined for export or supplied on ARE-3, a captive consumption exemption may apply, potentially avoiding immediate excise, and factual documentary evidence is necessary to determine applicable treatment. (AI Summary)
Die cost should generally be amortised into the assessable value and excise duty charged on that value, with separate assessable-value calculations for excise and sale purposes; however, where dies are retained and used for manufacture of components destined for export or supplied on ARE-3, a captive consumption exemption may apply, potentially avoiding immediate excise, and factual documentary evidence is necessary to determine applicable treatment. (AI Summary)