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


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

  1. Excise
  2. Valuation


About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 11 years. He also provides Accounts Tax GST Training in Delhi and Pune.