Long pending dispute under central excise valuation particularly in the automobile segment has been addressed. Various auto companies were before the courts challenging provisions contained under Explanation 1 of Rule 6 with the argument that Excise Duty can be charged on the value of consideration received form the buyer and value of loss of profit/ non recovery of cost can’t be treated as an additional consideration.

It has been proposed that if excisable goods are sold at a price less than the manufacturing cost and profit and no additional consideration is flown from the buyer directly or indirectly, the sale price shall be deemed to be the transactional value.

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