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In the process of simplifying excise procedures, the Government has issued a notification No. 2/2005-Central Excise (NT) dated 7.1.2005, bringing drugs and medicines under the purview of levying excise duty on the basis of retail price declared under Drugs (Price Control) Order, 1995. The notification shall come into force with effect from tomorrow. Retail price based assessment of excise duty avoids disputes on valuation and ensures certainty in assessment.
Excise duty on drugs and medicines will be levied on the value determined after deducting an abatement of 35% from the declared retail price. Drugs and medicines are often manufactured on job work basis and also by loan licensee. This leads to differences in practice of assessment and disputes. In order to ensure certainty in assessment, the provision of levying excise duty on the basis of retail price based assessment has been extended to medicaments, other than those medicaments which are exclusively Ayurvedic, Unani, Siddha, Homoeopathic or Bio-chemic.
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BSC/BY/GN-7/5
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