Page 83 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes
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Caution All refuse of excisable goods obtained under rule 192, which may remain after the
completion of the industrial process shall be stored separately and the manufacturer shall
inform the proper officer in writing the quantity of such refuse and the date on which he
proposes to destroy them at least seven days in advance and may destroy or otherwise
dispose of such refuse in the manner.

5.8 Determination of Value

RULE 3. The value of any excisable goods shall, for the purposes of clause (b) of sub-section (1)
of section 4 of the Act, be determined in accordance with these rules.
RULE 4. The value of the excisable goods shall be based on the value of such goods sold by the
assessee for delivery at any other time nearest to the time of the removal of goods under
assessment, subject, if necessary, to such adjustment on account of the difference in the dates of
delivery of such goods and of the excisable goods under assessment, as may appear reasonable.
RULE 5. Where any excisable goods are sold in the circumstances specified in clause (a) of sub-
section (1) of section 4 of the Act except the circumstances in which the excisable goods are sold
for delivery at a place other than the place of removal, then the value of such excisable goods
shall be deemed to be the transaction value, excluding the cost of transportation from the place
of removal up to the place of delivery of such excisable goods.
Explanation 1. - “Cost of transportation” includes -

(i) the actual cost of transportation; and
(ii) in case where freight is averaged, the cost of transportation calculated in accordance with
generally accepted principles of costing.
Explanation 2. - For removal of doubts, it is clarified that the cost of transportation from the
factory to the place of removal, where the factory is not the place of removal, shall not be
excluded for the purposes of determining the value of the excisable goods.
RULE 6. Where the excisable goods are sold in the circumstances specified in clause (a) of sub-
section (1) of section 4 of the Act except the circumstance where the price is not the sole
consideration for sale, the value of such goods shall be deemed to be the aggregate of such
transaction value and the amount of money value of any additional consideration flowing
directly or indirectly from the buyer to the assessee.

Explanation 1 - For removal of doubts, it is hereby clarified that the value, apportioned as
appropriate, of the following goods and services, whether supplied directly or indirectly by the
buyer free of charge or at reduced cost for use in connection with the production and sale of such
goods, to the extent that such value has not been included in the price actually paid or payable,
shall be treated to be the amount of money value of additional consideration flowing directly or
indirectly from the buyer to the assessee in relation to sale of the goods being valued and
aggregated accordingly, namely:
(i) Value of materials components, parts and similar items relatable to such goods;
(ii) Value of tools, dies, moulds, drawings, blue prints, technical maps and charts and similar
items used in the production of such goods;
(iii) Value of material consumed, including packaging materials, in the production of such
goods;

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