Proposal to modify the present abatement rates for products assessed under Section 4A (RSP based assessment) – Board invites comments
The CBEC has carried out a study to find out whether value determination under Section 4A is matching with the transaction value (Section 4 value) of the goods assessed under MRP Valuation, in most of the cases or not. This comparison has been made considering the fact that generally, the value determination under Section 4A should be more or less equal to the value determined under Section 4, because the abatement percentage prescribed by the Govt. generally consist of post-removal expenses. Board is aware of the fact that there could be some variation where the value determined under both the provisions may vary but as a matter of principle, there should not be large variation in majority of cases.
Analysis of the data shows that in respect of the six commodities, the value determined under Section 4A (RSP based value) is lower than the transaction value (value under Section 4) in more than 50% of the cases. These commodities are:
(i) Paints; (ii) Colour TV; (iii) Aerated Water; (iv) Ceramic Tiles; (v) Cosmetics; and (vi) Lubricants.
Board feels that the present abatement rate for these six commodities should be reduced in order to bring the assessable value determined under Section 4A nearer to the transaction value (Section 4) in majority of the cases.
Before taking any decision on this subject, CBEC would like to have the views and comments of the trade and industry Associations. In case the Associations feel that the study made by the department do not reflect the true position, in that case they may submit the data along with the documents for the products which are sold in maximum quantity to present their case. While submitting their representation they should provide the actual transaction value (excluding taxes & duties) in order to have comparison with the Section 4A value. In case the goods are sold form depot etc in that case the actual commercial invoice from the depot should be used.
The Chief Commissioners of Central Excise are requested to bring the contents of this letter to the notice of the major industries manufacturing the above mentioned items in their jurisdiction.
The comments of the Department, Associations and Industries may be sent by post along with the documents to Shri Sanjiv Srivastava , Director( CX -1/4), Room No.47 -B , Department of Revenue, Central Board of Excise & Customs, Ministry of Finance, North Block, New Delhi–110001. Comments along with any additional data that needs to be considered in excel format, may also be sent by e-mail to ashima_irs@yahoo.co.in or to sandevpan@gmail.com .
The comments and views of the industries may be sent by 20th May, 2009 positively.
CBEC Draft Circular in F No.6 /15/2007- CX.I ., Dated: April 30, 2009