Suppose Manufacturer wants to charge 100000 from wholeseller
Excise will be 12,5% of 1000000=12500
Manaufactuer can do Tax planning and prepare bill as follows
Sales Price 80000
Advertising Charges 20000
Excise =12.5% of 80000=10000
Hence Tax Saved =12500-10000=2500
To avoid such tax planning,Govt has said that Transaction Value includes such advertising charges
Excise in this case will now be 12.5% of (80000+20000)=12500
Written on Feb. 9, 2017, 7:46 p.m.