Tooling Cost Amortisation

[Guest]

Dear Friends,

I am proud to become a member TMI Family and I wish you everyone A Happy New Year in advance.

I have two queries on Tool Amortisation; 1) I will be amortising the Tool Cost as Cost Accountact certificate for the product manufactured out said tool. As per CA tool life is 50000 nos but Tool gets spoiled after completion of 10000 nos. Now whether I require to pay duty balance tool cost!!??

2) Secondly,  First I make the supplies to customer and after some months I realise the tooling cost from customer for the goods supplied earlier. In this senario how to treat the excise duty liability!!?

Thanks in advance for your valuable replies

[r.rajkumar kumar]

1.yes the balance duty is payable.total duty forthe tool less already amortized and balance tobe paid.

 

2.as per the p.o. from customer tools cost is payabale by the customer . hence amortisation of tool cost must charge from the begning. if your supplied with out amortisation now amortisation cost must charge for the earlier spplies and pay duty with interest. for the arrears.

AI Summary

Clarification on Excise Duty: Tooling Cost Amortization and Customer Payments Under Central Excise Rules A member of a discussion forum inquires about tooling cost amortization related to central excise duty. They present two issues: first, whether duty is payable on the balance tool cost when the tool's actual life is shorter than certified; second, how to handle excise duty when tooling costs are realized from customers after initial supplies. A respondent advises that the balance duty is payable for the tool, and if the tool cost is payable by the customer, amortization should be charged from the beginning. If not initially amortized, the cost must be charged retroactively, and duty with interest should be paid for arrears.