1. Outward Handling Charges

It is included in transaction value if

It is upto place of removal

+

If incurred by buyer as condition for sale of goods

 

2. Packing

Normally packing cost is included in Assessable Value

In case of reusable or durable packing, its life is limited. Amortized cost is already included in cost of product.

Hence separate addition is not necessary

However if audit reveals that cost of product does not include amortized cost, then this to be taken

 

3. Dharmada Charges (Charity Charges) recovered from customer

It is included in Assessable Value

 

4. Design/Development/Engineering Charges

T hese are also included if goods cannot be produced without them

 

5. Bought out items and accessories

Essential Items-Included

Optiional Items like accessories-not included

 

6. Consultancy charges

It is included, If it is related to design and layout

And for activities upto place of removal

 

7. Testing and Inspection Charges

It is included if done by seller

However if buyer does it through third party, then not includible

 

8. Errection, installation and Commission charges

It is not included if it results to immoveable property as immovable items is not excisable

 

9. Predelivery inspection charges and after sales services

It is included if collected by manufacturer

 

10. Freight

It is normally included as it is after place of removal

However charges from factory to depot will be included

 

11. Transit Insurance

Transit insurance is insurance charges to secure goods on transport

Hence it is also transportation cost like freight, they are not included

 

12. Delayed payment charges/ Interest on late Payment

It is of the nature of interest.

It is not included if it is shown separately and interest is on the price of goods

 

13. Bank Charges for collection of Sale proceeds

It is not included as it is not by nature of or by reason of sale

 

14. Notional interest on Deposit/Advance received

It is normally not included unless it can be proved that price is lowered because of sale

 

15. Discount (Trade discount/Cash discount)

All discounts are reduced while calculating transaction value

However, discount should be actually passed on to the buyer

  1. Excise
  2. Valuation
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides GST and Tax E-filinf training in Delhi. Register now.