In a relief to auto makers, the revenue department on Thursday said the decision to levy excise duty on manufacturing cost instead of discounted sale price will apply prospectively.
However, the Central Board of Excise and Customs (CBEC) has made it clear that following the Supreme Court order all car makers will have pay excise duty on manufacturing cost and not on discounted sale price.
“There will be no retrospective application of the Supreme Court order. Tax Department will go after car makers in case of genuine suppression of tax dues. Excise levy will have to be paid even in case of sale price being lower than manufacturing cost,” a finance ministry official told the news agency.
The CBEC, the official added, “is working on extending the decisions for automakers to companies in other sectors as well. The Supreme Court judgement will apply to all sectors”. The companies will have to pay excise on the manufacturing cost, he added.