Industry & Economy
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Excise and Customs
Ministry clarifies on MRP-based excise levy
K.R. Srivats
New Delhi
,
May 26
A section of corporate India may feel disappointed on this front. The Finance Ministry has clarified that a manufacturer of a product under Maximum Retail Price (MRP)-based excise levy would not be entitled to Cenvat credit on the service tax paid on freight incurred for moving the product from the factory gate to a depot.
This is because such expenditure would be treated as post-manufacturing expenditure in the case of MRP-based excise levy, where the place of removal for excise duty purpose is the factory gate.
"For MRP-based excise levy, I go by the ex-factory price and do not determine the depot price. The assessable value is determined at the factory gate. Whatever happens outside the factory gate for such items is outside the purview of excise department and cannot be eligible for Cenvat credit", Mr R Sekar, Joint Secretary, Ministry of Finance, said at a PHDCCI seminar here.
For items that are not under MRP-based excise levy, manufacturers have the option of considering depot as place of removal for excise duty purposes, and therefore, entitled for claiming input service tax credit on the service tax paid towards the freight incurred from the factory gate to the depot.
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