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`New excise norms need clarification'

Our Bureau

NEW DELHI, June 18

WITH less than a fortnight to go before the transaction-value-based excise assessment comes into force from July 1, a section of Indian industry has expressed apprehension over the successful implementation of the proposed new system.

In a statement, the Confederation of Indian Industry (CII) said that the very meaning of `transaction value' as provided under the new Section 4 of the Central Excise Act was prone to ``misinterpretation and would create complications''.

The Finance Ministry has already made several changes to the provisions relating to transaction-value based excise assessment, through amendments to the Finance Bill 2000, including alterations in the meaning and scope of `transaction-value' and `related persons'.

Even after the recent changes, the chamber is of the view that there is need for further clarity on the provisions before the new system becomes operational. CII has suggested that the Finance Ministry should come up with illustrations that would clearly elaborate the parameters that are to included and excluded on the price actually paid or payable for the goods while determining their respective transaction value.

Doubts still existed on whether transaction value would include freight and insurance charges, which were normally included in the invoice value, the chamber said.

While excise duty, sales tax and other taxes paid or payable on the goods have been excluded from the purview of transaction value, the chamber contended that the new meaning was, however, silent on the exclusion of various types of discounts which were allowed to be deducted in the earlier system of `normal price' based excise-assessment.

According to CII, such clarifications are needed to narrow the scope of different types of interpretations and to reduce disputes and litigation at the level of field officers.