MRP is Rs 190 & P O Quote Rs 225

[Avinash Bhavsar]

Dear Sir,

Customer has given us the Purchase Order of Automobile Spare Os Rs 225 each but MRP is Rs 190 which rate is applicable for Excise Duty charge please gudie and under rule.

[YAGAY andSUN]

If you bill at Rs. 225 then you would have to pay the duty on 225.  It is advisable to get the PO amended to the extent of MRP of Rs. 190/- if you able to make profits while selling on Rs. 190/-

AI Summary

Excise duty valuation: duty arises on the invoiced sale price; amend purchase orders to match MRP if feasible. Excise duty is payable on the invoiced sale price; if the seller bills at the higher purchase order price, duty is calculated on that billed amount. It is recommended to amend the purchase order to match the MRP so duty is charged on the lower MRP where commercial margins allow.