Written by: Express News Service
2 min readNew DelhiDec 18, 2013 01:25 AM IST
First published on: Dec 18, 2013 at 01:25 AM IST
The finance ministry will soon come out with a circular to implement a Supreme Court decision regarding valuation of goods sold below the cost price for levying excise duty.
The case pertains to Fiat India P Ltd where the apex court has ruled that where products are sold at considerable losses for an unduly long period of time for the purpose of market penetration,price is not the sole consideration and excise duty should be paid on manufacturing cost,plus a reasonable profit margin.
While the company was insisting that the duty should be levied on the discounted sale price,the revenue department was calculating it on the cost of car produced. After the ruling,the Central Board of Excise and Customs CBEC has started asking assessees to furnish cost data of various products for the previous years.
The modality of implementation of the decision of the Supreme Court is under consideration of a committee of Chief Commissioners. The circular in this regard will be issued by January 15,2014, the ministry has said.
The decision comes after a forum under Parthasarathi Shome,advisor to finance minister P Chidamabarm,set up in July,heard industry groups and government on tax-related issues or disputes to iron them out.
On service tax to be paid by reinsurance agents,the statement said the department will seek inputs from the insurance industry to ascertain whether there is double taxation of the brokerage paid to reinsurance agents. The panel suggested that a process is being designed to get the importers to register with the tax department,who may then more easily pass on the Cenvat credit of counter-veiling duty to a manufacturer. The new mechanism will be in place by December 31.
The guidelines will also be issued with regard to service tax refunds for exporters,distribution of Cenvat credit by input service providers and clarifications with regard to status holder incentive scheme.
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