30 December 2015
ED is calculated on basic even if discount is mentioned on invoice ?
I have observed Gov companies calculate ED on basic even if discount is mention on invoice
in private companies ED is calculated on net of discount
which is correct ?
30 December 2015
The Central Department has confirmed that cash discount is allowable as deduction, if actually passed on to buyer, if transaction is on principal to principal basis. CBE&C Circular No. 643/34/2002-CX dated 01-07-2002.
Discount on quantity, cash and turnover is deductible from assessable value if given under terms of sale or trade practice, known before removal of goods and actually passed on to buyers- Wearwell Tyres v CCE 2009 (12) TMI 416 - CESTAT, NEW DELHI = (2010) 257 ELT 126 (CESTAT).
Cash discount is cost of Finance – In CCE v Pace Marketing Specialities 2004 (167) ELT 401 (CESTAT) also, it was held that cash discount is cost of finance. It cannot form part of assessable value – same view in Malwa Cotton Spinning Mills v CCE 2007 (10) TMI 209 - CESTAT, NEW DELHI= (2008) 224 ELT 425 (CESTAT
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