K. VIJAY KUMAR1
MA, BL, B.Ed, MBA
The new concept of transaction value is likely to bring in a new era of provisional assessments. At any point of clearance if the value is not clear either to the assessee or the proper officer, perhaps recourse has to be made to provisional assessments. The following are some of the situations.
- When goods are sold a place other than the place of removal, the actual transport charges from the place of removal to the place of delivery is deductible from the transaction value. Now if there may be a doubt as to what the actual cost of transport is. This may vary and sometimes may not be even known at the time of transport. This has to be ascertained and verified. The natural urge is to rush for provisional assessment.
- When price is not the sole consideration for sale: - The amount of money value of additional consideration is to be added. Fine! but how? At the time of clearance of goods how do you know what is the money value of the additional consideration like free issue materials, tools and dies, drawings, packing material, engineering, art work, design work, plans and sketches etc? Well these are components whose money value is to be added to the transaction value to determine the assessable value. Solution > Jump into provisional Assessment!
- When goods are cleared for the first time to a depot: How do you calculate the normal transaction value of the goods sold from the depot at the time nearest to he time of removal. There has been no such sale. Answer: Provisional assessment.
- When there is doubt/dispute about the costing of captively consumed goods: What ingredients go into cost is itself a dispute. And the assessee may not be able to produce a cost statement at the time of removal. And some costs can be determined only after some time. Costs may also vary due to increased wages for staff (with retrospective effect), burden of unforeseen excise demands etc. In such cases --- you know the answer.
But is provisional assessments the answer? As such the department is bearing the burden of unnecessary Provisional assessments which are kept pending for decades for some silly reason, often the non availability of certain archaic records. With the best efforts these assessments remain provisional for years. Once an assessment is provisional, there is a tendency to keep it provisional forever. One reason may be a new officer takes over and he does not like to finalise the assessments kept pending by his illustrious predecessors. So they are rarely finalised.
I think, we should resort to provisional assessments in the rarest of cases, for it is very easy to get into but almost impossible to get out of. In cases where we are tempted to go for provisional assessments, it is humbly suggested that, instead of provisional assessments, the assessee may be allowed to pay some duty with a condition that the final price should be furnished within six months and if not furnished within six months, the proper officer should determine the price and the assessee should pay the difference if any. This revised provisional assessments will be in force for a maximum period of one year. I suggest that the rules may be suitably amended for this. EXCISE LAW TIMES – 01.11. 2000 – A 203