TaxTMI 
TaxTMI 
TOOL AMMORTISATION MATTER
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....OOL AMMORTISATION MATTER<br> Query (Issue) Started By: - NIMISH SHAH Dated:- 3-6-2015 Last Reply Date:- 4-6-2015 Central Excise<br>Got 1 Reply<br>Central Excise<br>DEA SIR, WE NEED PROPER CLARITY ON FOLLOWING. We are still puzzled & confused about TOOLINGS AMMORTISATION VALUE TO BE CHARGE IN INVOICE. PROCEDURE IS AS FOLLWS. * WE GET ENQUIRY FROM BUYER, QUOTE SEND EX. 250000.00 & FINALISED FOR....
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.... MAKING TOOLING FOR SUPPLY OF CASTINGS. * BUYER ISSUES P.ORDER FOR DEVELOPMENT OF TOOLING RS. 2,50,000.00 PLUS EXCISE DUTY 12.5 5 PLUS 2 % CST TOTAL RS. 2,86,875.00. * BUYER PAYS 25 % ADVANCE. * WE MAKE TOOL IN 2 MONTHS, RAISE INVOICE OF RS. 2,87,875.00 & TOLL SEND TO BUYER WITH INVOICE. * BUYER PAYS BALANCE TOWARDS TOOL DEVELOPMENT. * BUYER RETURNS TOOL UNDER 57 F 4 & PLACE ORDER FOR SU....
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....PPLY OF CASTING 1,00,000 PCS IN ONE YEAR AT FINAL PRICE OF COMPONENT RS. 100.00 , THIS COST INCLUDES ON LY RAWMATERIAL VALUE & OUR PROCESSING CHARGES ONLY. * WE SUPPLY CASTINGS AT RS. 100.00 COMPONENT COST PLUS 12.5 % EXCISE DUTY & 2 % CST TOTALS TO RS. 114.75 P.P. DEPT. CONTENTION IS THAT WE HAVE TO CHARGE TOOL AMMORTISATION VALUE ON FINAL COMPONENT VALUE OF RS. 100.00, SAY EX. RS. 1.00 AS TOO....
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....L AMMORTISATION COST, TOTALS RS. 101.00 P.P. ON THAT EXCISE DUTY NEED TO BE PAID. WHILE ON TOOL DEVEOLEMENT EXCISE DUTY IS PAID & AGAIN ON EACH COMPONENT TOOL AMMORTISA VALUE TO BE ADDED IN THE FINAL COST OF COMPONENT & EXCISE DUTY TO BE PAID ON SAME. IS IT CORRECT ? WE ARE CONFUSED & WHAT IS CORRECT PROCEDURE ? REGARDS NIMISH SHAH Reply By varun arora: The Reply: I think you have already c....
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....harged Excise duty and deposit the same to the government while handed over to the Customer. Now Question of Amortisation arise in case of Customer only. Deptt. can not raise a demand on you on another 1/- as you mentioned iin your case.<br> Discussion Forum - Knowledge Sharing ....