25 July 2011
As per Rule 6 of Excise Valuation Rules, 2000 ü Where the price is not the sole consideration for sale, ü the value of such goods shall be deemed to be ü the aggregate of such transaction value and the amount of money value of any additional consideration flowing directly or indirectly from the buyer to the assessee. The board has clarified under Rule 6 that the additional consideration should flow directly or indirectly from the buyer to the seller. In the given case the subsidy of 20% from the government could not be said to be additional consideration as it was not received from the buyer either directly or indirectly. Therefore, that would not be includible in the price of the goods for the purposes of excise. However, the 10% subsidy received by the assessee from the buyer was additional consideration. The fact that it was received under a policy of the government did not detract from the above position. A similar judgment was given by the Supreme Court in the case of Mazagaon Dock Ltd. where the subsidy received from the buyer directly/indirectly was included in the assessable value.
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