The Hindu Business Line : Ministry needs more data from industry for abatement of excise

THE Finance Ministry has asked trade and industry to furnish adequate data and information in support of their claims to increase the abatement for levy of excise duty and service tax.

While approaching the Advisory Committee for the enhancement of abatement levels, the industry would now have to submit information on sales pattern as well as the nature of trade margins and discounts in their respective industry segments, official sources said.

The Central excise law empowers the Union Government to specify the items (which are subjected to ad valorem levy) on which the excise duty should be assessed with reference to their retail sale prices (RSP). In such cases, the assessable value is arrived at after deducting the notified percentage of abatement from the RSP.

The quantum of abatement is notified by taking into account the amount of excise duty, sales tax, other taxes and trade margins. In case of certain taxable services, specified abatements from gross value are prescribed to arrive at the assessable value on which the service tax is charged.

The Revenue Department has pointed out that the Advisory Committee on Abatement was unable to examine and take a view on requests for changes in abatement in the absence of required data supporting such claims.

The Finance Ministry had in May 2005 set up an Advisory Committee to advise the Government on the quantum of abatement that could be granted to specified goods for levying excise duty and service tax.

After the committee was set up, the industry made several representations for an increase in abatement levels. The Advisory Committee, however, felt that there was a need for the industry to come up with latest data and information on trade margins and sales pattern if a decision on enhancing abatement is to be expedited. In a number of cases, representations had been made without adequate data in support of their requests for changing the level of abatement.

The Member (Central Excise) of the Central Board of Excise and Customs is the Chairperson of the Abatement Committee and the CBEC Member (Service Tax) is the Co-Chairperson.

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