Discount in bill

[Mridul Sethi]

Sir,

Pls let me clear that, for excise duty calculation is discount contant is considered or not. Actually we raise bill a party in the below manner.

Qty	100
Basic Price	161.54
Basic Value	16154.00
BED@10%	1615.40
Cess @ 3%	48.46
Total	17817.86
Less: Discount @ 1.65% on Basic Price	266.54
Balance Value	17551.32
Sales Tax @ 2%	351.03
Bill Value	17902.35

 

My query is that is always excise duty is charged irrespective of discount as shown in above calculation.i.e.can we not charge discount on Basic price & then do billing on balance amount. Pls clear it.

[SANJIV KOTHARI]

No, excise duty is leviable on Basic price only. Your calculation is in line with law.

 

Sanjiv

[Mridul Sethi]

Sir, can you plz give me the reference of Rule/Act in this regard.

[YAGAY and SUN]

Please refer circular no. 354/81/2000-TRU dated 30-06-2000 in this regard.  Further, also refer chapter 3 Part III Para 2.5 (iv) of CBE&C's manual, 2001.

[rajkumar shukla]

IF THE DISCOUNT IS A GENUINE TRADE DISCOUNT AND KNOWN TO THE CUSTOMER PRIOR TO REMOVAL OF GOODS AND ACTUALLY TRANFERRED O CUSTOMER, WHY CAN'T THIS BE ABATED FROM BASIC PRICE?

[rajkumar shukla]

PLEASE ALSO SEE PARA 2.5 (2) IV OF MANUAL OF SUPPLEMENTARY INSTRUCTIONS.

sir you r absolutely right. discount will be charged after excise. but excise duty is charged on abattment value of MRP.

AI Summary

Excise duty on basic price: discounts are applied after duty; genuine pre-removal trade discounts may be abated.
Excise duty is leviable on the basic price and is ordinarily calculated before applying discounts; billing that deducts discount after duty computation conforms with administrative guidance. However, a genuine trade discount known to the customer prior to removal and actually transferred may be abated from the basic price, subject to the valuation and abatement provisions set out in relevant administrative circulars and manuals.