Goods sold to relate person-taxability

[Guest]

Sir,

One Ltd. Company sells goods to its other unit.Naturally the goods sold are chargeable to duty at 110% of value. How to compute this, what price to be relied for computing taxable value.

[YAGAY andSUN]

Please refer Cost Accounting Standard -4 (CAS -4) in this regard.

[DIVYESH PANDYA]

RULE 8. Where the excisable goods are not sold by the assessee but are used for consumption by him or on his behalf in the production or manufacture of other articles, the value shall be one hundred and ten per cent of the cost of production or manufacture of such goods.

AI Summary

Related-party transfer valuation requires cost-plus basis for taxable value when goods are transferred within a group. For intra company transfers or internal consumption of excisable goods, valuation follows cost accounting principles and the statutory rule prescribing a cost based uplift: the taxable value is computed on the cost of production or manufacture increased to reflect the prescribed margin, namely 110% of the cost of production or manufacture, for excise duty purposes.