Transaction value

This query is : Resolved

CA.VIJAY KUMAR BARANWAL (Querist)
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27 December 2011 Dear Sir,
Our client is selling goods on Ex-factory basis and determined the price at the factory gate. However on request on buyer our client pays advance freight to the driver of the vehicle which the client recovers by charging in the Excise Invoice.It is basically a payment on behalf of buyer.
My question is whether excise duty is payable on advance freight amount under section 4(3)(d) of the transaction value.
Thanks is advance

Vijay Kumar Baranwal

U S Sharma

U S Sharma (Expert)
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29 December 2011 if the freight is charged in excise invoice, that would be part of assessable value, and place of sale would be clients house, not factory gate.

to avoid such litigations, use of debit notes is preferred stating that such debit notes were issued as the client denied to pay the transporter at destination and the consignee had to pay the same later and reimburse the same.