Excise Duty on Export goods

[Asa Dev]

Dear Sir,

We have an export contract on CIF UK Port basis. While making excise invoice, we have shown excise duty on CIF value. Now the excise department raised objection and asked us to charge duty on FOB value. Since there is no bifercation of CIF value, how can we arrive the FOB Value? OR is there any option to charge Duty on CIF value. We charge duty on export goods and apply for rebate. Your kind suggestion / advice shall be appreciated.

With regards

Asa Dev

9528533773

[email protected]

[SANTHANA KRISHNAN]

Excise duty is to be charged on FOB value only and not on CIF value. u r required to arrive at fob value from cif value by deducting actual or appxt freight and insurance value.trust this clarifies ur reqmts

regards

jr

[YAGAY andSUN]

By applying the reverse caculation (Actual freight or 20% of the FOB Value whichever is less and insurance 0.125%) you may arrive at the FOB Value for calculation of Liability under  Central Excise Duty.

[Vijay kumar]

the objection raised is correct. u have no option to pay duty on CIF value. u may arrive at the FOB value as suggested above. the excess duty paid will be paid back in cenvat credit account. strictly speaking, even the FOB value is not the proper value. it is the factory gate price which reflects the Section 4 value, as per Board's instructions in the matter, on which the rebate has to be computed.

[Guest]

The excise duty should be charged on basic/FOB value of your product. You can take it from your sales department either from PO given to the client or from the sales order raised by the sales department. You can also refer the calculation given by Mr Khatri.

AI Summary

Excise duty on exports must be charged on FOB value, not CIF, with FOB derived by deducting freight and insurance. Excise duty on exports is payable on the FOB (basic) value, not CIF; where only CIF is available, derive FOB by deducting freight and insurance (using actual amounts or reasonable approximations - freight subject to a commonly applied cap and insurance at a small percentage). Source FOB from sales documentation or compute it from CIF. Excess duty charged on CIF may be adjusted through cenvat credit or rebate procedures; rebate calculations should use the factory gate/basic valuation principle.