Taxindiaonline.com
Taxindiaonline.com Taxindiaonline.com TIOL Tube Taxindiainternational.com
 
LOGIN
Forgot Password |  Register  
Thursday , May 5, 2016 | Updated : May 5, 09:04 IST
Income Tax    Customs    Excise    Service Tax    FEMA    DGFT    SEZ    Misc    Pitara    Budget   
About Us Contact Us Advertise
Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com
NEWS FLASH
 
DVAT - Whether assessee, which is a licensee in respect of certain advertisement display sites, is liable to pay VAT on revenue earned from display of advertisement even if there is no transfer of any right to use those sites - NO: HC (See 'Breaking News') SC Collegium recommends four names for elevation as New Judges - Chief Justices of Allahabad + MP + Kerala; Former Addl SG I Nageswara Rao also nominated for direct appointment + Uttarakhand HC Chief Justice shifted to AP & Telangana HC Rajya Sabha Chairman accepts Mallya's signed resignation letter DGFT notifies List of Services eligible under SEIS Scheme for deemed foreign exchange benefits + MEIS - landing certificate not required against 2787 lines (See PNs in 'What's New') Mangalore Airport Customs seizes gold, cigarettes & FC worth Rs 93 lakhs Web Portal to curb exploitation of Contractual Workers launched (See 'Mixed Buzz') NTPC commissions 200 MW solar power project (See 'Mixed Buzz') Govt always received more complaints against IAS than IPS in recent years: DoP&T MInister CIC asks Law Ministry to modernise Notaries System leaving no room for frauds India's private sector activity growth softens in April Rajya Sabha Ethics Committee recommends expulsion of Vijay Mallya with immediate effect India says no to Apple's refurbished iPhones Show Cause Notices Issued by DRI Invalid - Retro Amendment to Section 28 of Customs Act notwithstanding (See 'DDT') Implementation of TFA - Govt to consult industry & trade (See 'Mixed Buzz') CX - Interest can be demanded even when duty has been paid - proviso to s.11AB(1) becomes operational only when duty becomes payable consequent to issue of Sec 37B order: CESTAT (See 'Breaking News') Constitution of CESTAT benches by its Member (J) - Is it Legal? (See 'Guest Column') Service Tax on Tatkal Tickets by Indian Railways - Naturally Bundled in ordinary course of business? (See 'DDT') 2014-15 - CSR Expenditure - Rs 6337 Cr utilised out of Rs 8347 Cr (See 'Mixed Buzz') Single Window Service by Customs - 3.13 lakh Bills of Entry processed in a month, says Jayant Sinha
 
Bookmark and Share
Duty computation for DTA sale by EoU with effect from March 1, 2008

MARCH 2, 2008

By Joseph Prabakar, Advocate

EoUs are allowed to clear / sell goods in the Domestic Tariff Area ( DTA ) up to a limit of 50% of the value of exports made during the previous year. Excise Duty to be paid by EOU for DTA sale would be equivalent to applicable customs duty payable on similar goods if the said goods were to be imported. Central Excise Notification No 23/2003 dated March 31, 2003, provided for exemption for EOU's on DTA sale whereby the rate of duty prescribed was equivalent to 25% of the applicable Basic Customs Duty (BCD) plus the applicable CVD. Notification 23/2003 also provides for exemption of Special CVD of 4%.

An amendment has been carried out in Central Excise Notification No 23/2003 whereby the rate of Excise Duty prescribed for DTA clearance by EOU has been changed as equivalent to 50% of the applicable Basic Customs Duty (BCD) plus the applicable CVD.

If a machinery is cleared by an EOU, the Excise Duty rate would be equivalent to 50% of the applicable Basic Customs Duty (BCD) for the machinery plus the applicable rate of CVD for the machinery. With effect from March 1, 2008 , Excise duty calculation by an EOU for DTA clearance, after taking into account the reduced rate of excise duty of 14% and the amendment made to Notification 23/2003 dated March 31, 2003, is as shown below.

Illustration for DTA sale of machinery by an EOU (Rate of Basic Customs Duty for Machinery is 7.5%)

Assessable value     = Rs.100
Basic Customs Duty = 50 % of 7.5 = Rs 3.75
Value for levy of CVD  = Rs 14.96 (available as Cenvat)
Total duty payable = 3.75 +14.96  = Rs 18.71
Primary Education Cess @ 2% on 18.71  = Rs 0.374
S & H E Cess @ 1% on 18.71  = Rs 0.187
Total Excise Duty payable  

Rs 19.27 or 19. 27%

So, the effective rate of duty from March 1, 2008, for DTA sale by an EOU, would be 19.27% as against 19.22% earlier (till today).

It may be noted that the Special CVD of 4% is not to be included in the computation as the same continues to be exempt.


 RECENT DISCUSSION(S) POST YOUR COMMENTS
   
 
Sub: useful calculation

Sir,

Author has explained the duty calculation on DTA clearances considering changes effected in the budhet with example.Very good and useful example indeed.Example given under Notification 22/2006 that amended 23/2003 did not consider 2percent education cess while calculating 20percent CVD.However author has calculated taking CVD as 14.42 percent which includes 14 percent equivalent to CE duty and 0.42 equivalent to Ed cesses.I agree with his method of calculation.

Posted by rrkothapally rrkothapally
 
Sub: Customs Education Cess component missing

Duties levied on imported goods are -

i) basic customs duty
ii) CVD
iii) Primary ed. cess on CVD (2% of ii)
iv) Higher Ed. Cess on CVD (1% of ii)
v) Primary Ed. Cess on customs duties (2% on (i+ii+iii+iv)
vi) Higher Ed. Cess on customs duties (1% on (i+ii+iii+iv)

Duty payable on DTA clearances of EOU, which is leviable under Section 3 of the C.E. Act, 1944, the cess calculation given at v and vi above, have not been considered.

The exemption under Notification 23/2003 is only in respect of (partial exemption) basic customs duty and 4 pc CVD, but it does not exempt the customs education cess

For example given in the article

Value = Rs.100
i) BCD = Rs.3.75
ii) CVD = Rs.14.53
iii) PEC on CVD (2% of ii) = Rs.0.29
iv) HEC on CVD (1% of ii) = Rs.0.15
v) PEC on Customs duty = Rs.0.37
(2% of (i + ii + iii + iv)
vi) HEC on Customs duty = Rs.0.19
(1% of (i + ii + iii + iv)
=========
vii) Excise duty Rs.19.27 on DTA clearances
(sum of i to vi)

viii) PEC on Excise duty(vii) Rs.0.39
ix) HEC on excise duty (vii) Rs.0.19

x) Excise duty + Cess payable
on DTA clearances
(vii + viii + ix) =Rs.19.85


Posted by PradeepDShah PradeepDShah
 
 
 
Download TIOL App
TIOL SEARCH
 
TIOL Subscriptions
 All-In-One Package
 Indirect Tax Package
 Income Tax Package
<< More Packages>>
 
   
HOME    BACK TO TOP   
             
Income Tax Customs Excise Service Tax FEMA DGFT SEZ Misc Pitara Budget
  • Notifications
  • Circulars
  • Instructions
  • SC Cases
  • HC Cases
  • ITAT Cases
  • Advance Ruling
  • Settlement
  • Other Cases
  • Directorate of Income Tax (Systems)
  • Tariff Notfn
  • CVD
  • Non Tariff Notfn
  • Circulars
  • Anti-dumping Notfn
  • Safeguard Duty Notfn
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • Settlement
  • Drawback Cases
  • MISC Circulars
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • Clean Energy Cess Notfn
  • Excise Amendment
  • MISC Circulars
  • 37B Order
  • Commr.(A) Order
  • Settlement
  • Tribunal
  • Notifications
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • FAQ
  • Finance Act, 1994
  • Commr. (A) Orders
  • 37B Order
  • Removal of Difficulty
  • VCES
  • Accounting Head
  • Miscellaneous
  • DIPP Notification
  • Exchange Manual
  • Fema Notifications
  • SC Cases
  • HC Cases
  • RBI Notifications
  • RBI Circulars
  • Act
  • Rules
  • Regulations
  • Master Circulars
  • PMLA Notifications
  • Depository Scheme
  • Press Note
  • Notifications
  • Circulars
  • Public Notices
  • Trade Notice
  • FTDR Amendment 2010
  • Notifications
  • Instructions
  • Act 2005
  • Rules 2006
  • DGEP
  • State Acts
  • State Policy
  • MISC
  • SC Cases
  • HC Cases
  • VAT Cases
  • Service News
  • Promotion
  • Transfer
  • Deputation Posts
  • Cadre Review
  • Transfer Policy
  • Training Circulars
  • Recruitment Rules
  • Pay Commission
  • Service Cases
  • The Insider
  • MISC
  • Budget Speeches
  • Union Budgets
  • Economic Surveys
  • TRU - D. O. Letter
  • Finance Acts
  • Finance Bill
  • Budget Circular
  • A Taxindiaonline Website. Copyright © 2016 Taxindiaonline.com Pvt.Ltd. All rights reserved. | Powered by 4th Dimension