Basis of Computing Duty Payable
It is charged as follows
- Specific Duty
- Compounded Levy Scheme
- Duty based on capacity of production
- Duty based on value (Advolerem duty)
Specific Duty
Duty is based on length, breadth, height, weight etc
Example: Duty on cigarettes is calculated on the basis of length.
Compounded Levy Scheme
Duty is levied as per specified factors, like, number of machines installed
Examples
ED on stainless steel patta is 40000 per machine installed per month
ED on aluminum is 40000 per machine installed per month
Duty based on Production Capacity
Here duty is levied on the basis of production capacity .Actual production is not important in this case
Example: Duty on Pan masala and gutkha is levied as per this scheme
Duty based on value
It is also called advolerem duty
Here duty is charged at a percentage of value
Value is determined as per different methods as shown below
- Duty based on tariff value
- Duty based on Retail Sales price
- Valuation under Section 4
Lets study these in detail one by one
