Circular No. 1082/03/2022 – CXÂ
F. No. 354/02/2022-TRU
Government of India
Ministry of Finance
Department of Revenue
(Tax Research Unit)
Room No. 156, North Block
New Delhi, the 1st February, 2022
To,
All the Principal Chief Commissioners/ Chief Commissioners of Customs & GST,
All the Principal Directors General/ Directors General of Customs & GST
Madam/Sir,
Sub: Valuation of tobacco and tobacco products for the purposes of payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD) -reg.
Representations have been received seeking clarification on the manner of
computation of valuation, after admissible abatement, for the purposes of computation
and payment of Basic Excise Duty and National Calamity Contingent Duty (NCCD). It
has been argued that on calculation of excise duty and NCCD on the value arrived at
after abatement on the retail sale price and thereafter computing Goods and Services Tax
(GST) on such value inclusive of the excise duty and NCCD results in the total retail sale
price of such tobacco and tobacco products overshooting the declared retail sale price,
and accordingly, the rate of abatement is being questioned citing the increase in NCCD
rates in the year 2020.
2.1 As per section 4A of the Central Excise Act, 1944, retail sale price based assessment
has been prescribed for tobacco and tobacco products (like chewing tobacco,
preparations containing chewing tobacco, Jarda scented tobacco, Pan masala containing
tobacco) and an abatement of 55% on the retail sale price has been prescribed for such
products. Accordingly, assuming the retail sale price to be Rs. 100, the basic excise duty
and NCCD is computable on an assessable value of Rs 45. The cumulative basic excise
duty (@0.5%) and NCCD combined being 25.5%, at present, on such products, the
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Yours faithfully,
(Piyush Kumar Ankit)
Technical Officer (TRU-I)