Valuation of Sales Return

[JOHN SHANNEL]

Ours is a snacks co. The Sales returns is almost 4% of our sale. Our Price list for our products keeps on changing atleast once in a month. We receive sales returns from our distributors. We value our stocks approximately since we do not have any record on which price it is sold. Is it right. Is there any case law.

AI Summary

Snacks company struggles with valuing returned stock; advisor suggests Rule 16 compliance for tax and duty guidance. A snacks company experiences a 4% sales return rate and faces challenges in valuing returned stock due to frequent price changes. They lack records of the sale prices and seek guidance on proper valuation and tax implications. An advisor suggests following Rule 16 of the Central Excise Rules 2002, including maintaining a register for returns and managing Cenvat Credit. The company clarifies that returned snacks are destroyed and not resold, questioning the need for excise duty. The advisor recommends seeking remission of duty for non-marketable returns and clarifies duty obligations for replacements.