It means price actually charged is inclusive of duties
In this case, total amount received from customer is Amt + tax
Format of Computation
Price Actually paid for goods sold
+
Money value of additional consideration
=
Price cum duty
Less
Sales Tax
Net Price cum duty
Duty payable= (Net price cum duty x Rate of duty)/(100+ Rate of duty)
Assessable Value= (Net price cum duty x 100)/(100+ Rate of duty)
Q1
A sells the goods for RS 200 including taxes
(12.36% Excise duty is included in it)
View answer
Amount of Excise Duty= 200*12.36/(100+12.36)
= 200*12.36/112.36
= 22
Q2
A sells the goods for RS 200.He does not charge excise duty separately on goods as he belived his goods were exempt
(But later he came to know that actual rate of duty was 12.36%)
View answer
200 amount will be deemed to be including excise
Amount of Excise= 200*12.36/(100+12.36)
= 200*12.36/112.36
= 22
Q3
A sells goods to B for RS 200 including taxes to B
A collected Rs 50/piece separately from B but did not show it in invoice
View answer
Amount of Excise= (200+50)*12.36/(100+12.36)
= 250*12.36/112.36
= 27.5
Q4
A sells goods to B for RS 200 including taxes to B
He charged 8% duty
Actual duty rate is 12.36%
View answer
200 amount will be deemed to be including excise of 12%
Amount of Excise= 200*12.36/(100+12.36)
= 200*12.36/112.36
= 22
Exam Questions
Question 13
Explain the term “price cum duty” as per Central Excise Act, 1944.
View answer
Price cum duty is the sum total of price actually paid for the goods sold and money value of
the additional consideration flowing from buyer to seller in connection with sale of such goods.
Such price cum duty after excluding sales-tax and other taxes actually paid, is deemed to be
inclusive of the excise duty payable on such goods [Section 4(1) of the Central Excise Act,
1944].
Price charged (exclusive of sales tax/local taxes) will be taken as price-cum-duty in the
following cases:-
(i) If the assessee has collected less duty from the buyer than what is due; or
(ii) If the assessee has not collected any duty from the buyer even though the product is
liable to duty; or
(iii) If the assessee has paid duty on lesser value due to receipt of additional consideration.