“A” company purchase the material from “B” company and “B” Co. repack and labels it and fix the MRP before removed the said goods to “B’ co.’s customers.
While shipping the said goods “A” company charges the excise duty on” Transaction value” if it is direct from their manufacturing unit and on their MRP if it is from their Spare Parts Division.
Query- Why should “B” Co. charge the Excise duty on their MRP basis while I have to pack, re-pack or re-label it, and then discharge the excise duty on our MRP to the ultimate consumers in the retail market. Pls. enlighten us what is the correct position of law in this regard.
Best Regards,
Sanjay Sharma
Excise Duty on Repacked Goods: Understanding MRP-Based Valuation Under Legal Metrology Act and Central Excise Valuation Rules. A discussion on the valuation of central excise duties for spare parts involves a query from a company ('A') purchasing materials from another company ('B'). 'B' repacks, labels, and sets the MRP before selling to its customers. The issue raised is why 'B' charges excise duty based on MRP when 'A' also repacks and relabels the goods, charging excise duty on their MRP. Responses clarify that repacking and relabeling constitute manufacturing, requiring excise duty on the new MRP. Legal references include the Legal Metrology Act, 2010, and Central Excise Valuation Rules, 2008, highlighting different excise duty applications based on transaction type. (AI Summary)
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