Determination of assessable value for levy of excise duty where an incentive is provided by the State Govts. in the form of retention of Sales-tax by the manufacturers

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....ircular No. 4/85(F.No. 6/15/85-CX.1) dt. 14.2.85 regarding addition and exclusion of sales-tax in the assessable value. The trade has raised a doubt about the deductions given in respect of sales tax leviable by State Government, while determining the Assessable value. The following three situations arise as a result of incentive schemes formulated by some of the State Governments for ensuring rapid industrialisation in the backward areas of the states:- i)    Exemption from payment of sales tax for a particular period; ii) Deferment of payment of sales tax for a particular period; iii) Grant of incentive equivalent to sales tax payable by the units. 2. The matter regarding the above three situations h....

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....ment of Revenue Revenue regarding the inclusion/ exclusion of sales tax from the sale price for determination of the assessable value for levy of Central Excise duty in terms of Sec. 4 of the Central Excise Act, 1944 (Act for short). 2. The following  three situations arising as a result of incentive scheme formulated by some of the State Government for ensuring rapid industrialisation in the backward areas of the states have been mentioned:- (i) Exemption from payment of sales tax for a particular period; (ii) Payment of sales tax deferred for a particular period; and (iii) Grant of incentive equivalent to sales the payable by the units. 3. Section 4 of the Act is regarding valuation of excisabl....