Mrp valuation

This query is : Resolved

lakshmi (Querist)
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19 October 2011 Sirs,

A paint manufacturer clears his goods under MRP to his depots situated all over the country.

He avails credit on GTA (upto godown) and godown rent claiming that the depot is the place of removal.

Department first directed them to pay the differential duty of 2% on the goods held at stock in the godown when the rate of duty was revised from 8 to 10%. Assessee contended that when the goods are cleared from the factory from the place of removal there is no need to pay the differential duty of 2%.

To this point the dept claimed that when the place of removal is factory gate they are NOT eligible to avail credit on GTA (upto the place of removal) and the godown rent.

Which point is right? Whether 2% differential duty is to be paid or credit is to be reversed?

Can anyone throw light on the issue

with regards

lakshmi

U S Sharma

U S Sharma (Expert)
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20 October 2011 department is correct, you can not take benefit both sided, either you have to fix factory gate as clearance, and forget input credit on GTA/godown rent, or fix godown as place of clearance, and pay diff of duty.