Central Excise valuation – Return fare – Includible?
A manufacturer sends his goods to a dealer in his own transport and collects transport charges. Now the transport can be used only for a particular type of goods, say autos or cars. In the return journey, the vehicle has to come back empty as it cannot be used for transporting anything else. Now the manufacturer collects charges for the return journey also. Is this return fare includible in the assessable value?
Board says, yes. In the latest clarification on valuation, Board informs,
“As per Rule 5 of the Valuation Rules the actual cost of transportation from the place of removal up to the place of delivery is only to be excluded. If the assessee is recovering an amount from the buyer towards the cost of return fare of the empty vehicle from the place of delivery, this amount will not be available as a deduction. Therefore, unless it is specifically mentioned in the invoice that the transportation charges indicated therein do not include cost of transportation for the return journey of the empty truck/vehicle, the deduction of the said transportation charges will not be admissible.”
CIRCULAR NO. , Dated: April 12, 2006