Education Cess rounding off

This query is : Resolved

Vijayaganesh Sampathkumar (Querist)
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11 September 2008 I would like to understand how Rounding off is to be done for Education Cess.

My understanding is that All Excise duties as well as cess amounts should be rounded off to the nearest rupee.

Suppose there is an excise invoice for items whose Assessable Value is 7320.

14% Excise duty = 1024.80 (1025 when rounded off).

Should i calculate Education Cess of 2% on 1024.80 (1024.80*2/100 = 20.496, rounded off to 20) or should i calculate Education Cess of 2% on Rounded off Excise duty of 1025 (1025*2/100 = 20.50, rounded off to 21).

I am confused what is the correct education cess that should appear in the invoice. Should it be the one calculated on the unrounded off excise duty or should it be the the one calculated on the rounded off excise duty?

What is the point of view of law regarding this? Can anyone provide any reference?

I could not locate any reference as to how the cess should be computed. If anyone can point me in the correct direction, it would be great.

Thanks in Advance.

Best regards / Vijay

CHEZHIYAN

CHEZHIYAN (Expert)
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11 September 2008 whatever is your excise duty collect cess on that amount.. either rounded or not rounded

CA. Dashrath Maheshwari

CA. Dashrath Maheshwari (Expert)
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11 September 2008 Section 37D of Central Excise Act, which is also made applicable to service tax, requires rounding up of tax. However, this is only while making monthly/quarterly payment to Government. Rounding up of duty in each Invoice is not envisaged in section 37D of Central Excise Act.

Therefore you can collect cess on non-rounded duty amount, and then roundoff to the both.

**DM

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