06 September 2012
An agreement for supply of coal between BCCL (A subsidiary of Coal India Ltd.) and a Thermal Power Station is made. Since coal is an important input for Thermal Power Station for generation of electricity, hence agreement also includes,in addition to price of Coal, a payment named "Performane Incentive". As per the agreement, the provision for payment of Performance incentive is attracted when supplier(BCCL)achived to supply the coal at or above some specified quantity. Now the question is whether EXCISE DUTY is payable on"Performance Incentive"
06 September 2012
if such incentive is part of manufacturing and trading account, and based on clearance value, then it should get added ( ref sec 4 of manual)
however if its not related to Manufacturing and trading, and is accounted in P/L account as other receipts, then not charged with excise.
CAclubindia
