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Excise on promotional schemes

Jeevesh Mehta (Advocate- Corporate Commercial & Indirect Tax Advisory) (861 Points)

09 July 2009

Dear all,

A company manufactures certain product. As an promotional scheme they give free products like Tooth paste / Shampoo with the main product.

These free products are procurred from different manufacturers.

Now at the stage of removing the manufactured product from factory along with free promotional products. what would be the Duty liability?

Free products are obviously duty paid products. but the manufacturer can not change the MRP of the main product.

Whats the terat ment... please advice ..

Regards

Jeeevsh

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2 Replies

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 12 July 2009

Excise duty is on manufacture- thus the product, which has not been manufactured, there is no Excise duty liability.

However, answer to your question depends upon various factors like whether credit is being taken on such brought out items, how duty is being paid on combined packages under Section 4A etc.

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Ram kr. (Buisness) (883 Points)
Replied 18 September 2009

Dear Experts,

Does it any rule or notification in which we can sell our manufacturing product to Govt. Instituition, Govt. social service plan, like unops or unicef free of excise duty.

Thanks