Gift is liable to excise duty or not

[Mridul Sethi]

A product gifted (not sold) by a manufacturing concern(say car by Maruti Udyog) in any contest is liable to excise duty or not?

[YAGAY and SUN]

Central Excise duty is on Manufacturing of goods and for convenient purpose, it is being collected on the removal of goods.

Therefore, Central Excise duty will be paid on such kind of removals.  VAT will not be payable but the ITC on inputs involved in manufacturing of car will be burnout.

[MANDAVILLI RAMAKRISHNA]

excise duty to be paid basing on the assessable value but not on the basis of commercial value. so you have to pay.

[Harishanker Patel]

Sir,

What will be the assessable value for a gifted car whether it may be only CAS4 amt or CAS4+10% or any other.

AI Summary

Excise duty on gifted goods: removal treated as taxable event, VAT not payable and input credit extinguished. A gift of manufactured goods is treated as a removal subject to excise duty; VAT is not payable but input tax credit used in manufacture is extinguished. Duty is to be computed on the assessable value of the removal rather than on a mere commercial or promotional valuation.