Taxindiaonline.com
Taxindiaonline.com Taxindiaonline.com TIOL Tube Taxindiainternational.com
 
LOGIN
Forgot Password |  Register  
Tuesday , September 27, 2016 | Updated : Sep 27, 15:09 IST
GST   Income Tax    Customs    Excise    Service Tax    FEMA    DGFT    SEZ    Misc    Pitara    Budget   
About Us Contact Us
Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com
 
 
NEWS FLASH
 
Evasion of Service Tax - DGCEI case against Makemytrip.com + e-Biz.com + Ibibo.com - Supreme Court grants blanket stay on Delhi HC order granting refund and passing strictures against officials Govt to review MFN status granted to Pakistan; Congress supports it CBEC releases more GST Draft Rules & Formats - this time for Refund + Returns + ITC Mismatch + GSTR 9B; Last date for feedback is tomorrow (See 'Business Process' in 'GST') Kolkata Airport Customs seizes 2700 cartons of cigarettes + about 2000 wrist watches + about 100 laptops + 16 iPhones from 15 pax Government Speed Track - GST CBEC Releases Draft Rules and Formats (See 'DDT' Column) CBDT to accept IDS declarations till midnight on Sept 30, 2016 I-T - Whether mere transfer of shares from stock-in-trade to investment leads to any taxing event and that makes assessee liable to pay tax on such income - NO: HC (See 'Breaking News') Treading the GST Path - X - Registration - Some practical issues (See 'ST se GST tak') Service Tax - Yoga Retrospectively Exempted (See 'DDT') ST - Limitation is essentially a question of fact - since disputed question of facts are to be examined, matter has to be agitated before Tribunal: High Court (See 'Breaking News') TDS in GST regime (See 'ST se GST tak') Central Excise - directions to file appeal to be given by the Commissioner only to the same adjudicating authority CESTAT LB (See 'DDT') CX - Valuation - Place of removal is depot - Discounts allowed in price contracted for sale from depot would be allowable as deduction from such price: CESTAT (See 'Breaking News') Place of Supply of BOFS reversed under GST Model Law (See 'ST se GST tak') Govt seeks comments on GST Draft Rules & Formats by Wednesday (See Business Process in 'GST' for details) Justice Tarun Kumar Kaushal appointed as New Chairperson of DRAT for five years (See 'Administrative Order' in TIOLCORPLAWS.COM) Govt Panel approves 3 Greenfield Airports in AP (See 'Mixed Buzz') Rendering of Yoga Service - non-collection of service tax - Govt grants Section 11C benefits (See 'Not 42' in What's New) PM holds review meeting on Indus Water Treaty; SC declines to hear urgent PIL on water treaty Former PM Dr Manmohan turns 83; PM greets him Human rights forum in Mexico urges American expats to vote against Trump ISRO successfully launches weather satellite SCSAT-1 & 7 other co-passenger satellites Has the nation been misled on GST? (See 'Guest' Column) Official email address and office telephone number on Notice u/s. 143(2) of the Income Tax Act (See 'DDT') Quantification of duty - a pre-requisite for filing appeal? (See 'Guest' Column)
 
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 on the App Store
Get it on Google play
TIOL SEARCH
 
Visit IDS
Visit TIOLCorplaws.com
TIOL Subscriptions
 All-In-One Package
 Indirect Tax Package
 Income Tax Package
<< More Packages>>
 
   
             
Income Tax Customs Excise Service Tax FEMA DGFT SEZ Misc Pitara Budget
  • Income-Tax Rules
  • Income-Tax Act
  • Notifications
  • Circulars
  • Instructions
  • SC Cases
  • HC Cases
  • ITAT Cases
  • Advance Ruling
  • Settlement
  • Other Cases
  • Directorate of Income Tax (Systems)
  • Reports
  • Customs Rules
  • 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
  • CCRs - 2004
  • Central Excise Rules
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • Cesses Notfications
  • Excise Amendment
  • MISC Circulars
  • 37B Order
  • Settlement
  • Commr.(A) Order
  • Tribunal
  • GST Kitty
  • Notifications
  • Service Tax Rules
  • 37B Order
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • FAQ
  • Finance Act, 1994
  • Commr. (A) Orders
  • Removal of Difficulty
  • VCES
  • Accounting Head
  • Miscellaneous
  • DIPP Notification
  • FDI Approved
  • 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
  • Miscellaneous
  • 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