Excise duties for tooling amortization

[Former Member]

Dear All,

Our customer paid the tooling amortization amount initially.

We used to send the seperate invoice for this tooling amount.

Here a doubt arises.

For this scenario, do we have excise values (BED, ECS, SECESS)?

Could someone confirm?

Regards,

Mullairaja

[Former Member]

Answered

[Former Member]

Any suggestions

[former_member187989]

Check this link [Customer tool(Capital goods material)|;

[Former Member]

After seeing that thread, I got confused.

While calculating, VAT or CST, they are deducting tool cost, then why it is added initially.

Mr.Lakshmipathi says. we should not add tooling cost with the selling price.

What is meant by Tooling cost then...I am confused.

Could you please clarify.

Regards,

Mullairaja

[Lakshmipathi]

As per Central Excise regulations, if you are adding any tool cost over and above the selling rate, that should be identified clearly. This means, if you add the tool cost over selling rate, a text should flow in billing document stating "An amount of xxxxxxx is recovered as a tool cost.

If you show the amount separately as I said earlier by way of a condition type, your ABAPer's job is easy by fetching that condition type value in output.

Nevertheless, you add the tool cost or show separately, it should be accounted and showed to Excise authorities clearly.

Better ask the client to check with their Excise Range Office and sought their opinion.

thanks

G. Lakshmipathi

[Former Member]

Ok. Understood.

Suppose if we are adding Tooling with the exisitng Condition type (Say PR00), then we need to give the explanation in the billing document. As you suggested, some text should appear.

If we are maintaining tooling cost as a seperate condition type, it is not necessary.

Am I right. In our case we are having seperate condition type for Tooling cost.

Regards,

Mullairaja

[Lakshmipathi]

It is better you leave the discretion to the client who have to check with their Excise range. You can go ahead based on whatever they confirm.

Whatever I had suggested on earlier occasions, I personally handled such situations and this may vary from place to place.

thanks

G. Lakshmipathi