- 4: Valuation of excisable goods for purpose of charging of duty of excise -Assessable value – Appellants selling cars on price lower than the cost of production main reason for assessees to sell their cars at a lower price than manufacturing cost was to penetrate market and this constituted extra commercial consideration – Since price charged was not sole consideration, hence, value was to be determined as per valuation rules.
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Editorial: The above ruling was in the context of “normal price”. Normal price is a deemed price. There are no words “ordinarily sold” under section 15(1) of the CGST Act. Section 2(31) of CGST Act, 2017 defines “consideration” It is modelled on the definition under section 2(d) of the Indian Contract Act. The same must be a benefit derived by the assessee.
The expression “sole consideration” would also have to be read in context with the rules. Under the CGST Rules, there is no rule which provides for notional additions (unlike erstwhile Central Excise Valuation Rules). GST is a transaction based tax. It is a contract based levy. Hence, value would be the contract value in terms of section 15(1) of the Act, subject to exceptions stated therein. Supply below cost and bulk discounts cannot be question under GST. The said judgment, in my view, would have no application under section15(1) of the Act.
“Faith… must be enforced by reason… when faith becomes blind it dies.”
– Mahatma Gandhi
CCE v. Fiat India (P) Ltd. (2012) 37 STT 147/25 taxmann.com 534 (SC)/ 2012 (283) ELT 161 (SC)/(2012) 9 SCC 332
Central Excise Act, 1944
S. 4: Valuation of excisable goods for purpose of charging of duty of excise -Assessable value – Appellants selling cars on price lower than the cost of production main reason for assessees to sell their cars at a lower price than manufacturing cost was to penetrate market and this constituted extra commercial consideration – Since price charged was not sole consideration, hence, value was to be determined as per valuation rules