21 July 2012
As per the central excise valuation rules (transaction value -sec 4) the cost of packing charges is to be included and central excise will have to be paid. Once excise is charged, VAT has to be collected for that value also. Please see the following rules given by the Dept.
(iv) Inclusion in the price
Some of the expenditures like packing charges, designing and engineering charges, handling charges incurred within the factory are required to be included in the price if they are not already included.