DRAFT CIRCULAR - CE, DT. 07/03/2006
- Document type
- Circular
- Reference no.
- M
- Dated
Deduction of Cost of Transportation for Return Journey
Deduction of Cost of Transportation for Return Journey -regarding
2. The clarification given for the Point of Doubt mentioned at Serial No. 2(b) of the said Circular stands modified as under:
| Old Sr.No. | Point of Doubt | Earlier Clarification | Amended Clarification |
| 2(b) | If manufacturer/ transporter charges cost of transportation both for outward journey up to the point of delivery and return therefrom, whether the cost of transportation for the return journey of the empty truck/vehicle should also be allowed as deduction ? | As per Rule 5 of the Valuation Rules the actual cost of transportation from the place of removal up to the place of delivery is only to be excluded. If the assessee is recovering an amount from the buyer towards the cost of return fare of the empty vehicle from the place of delivery, this amount will not be available as a deduction. If, however, only the cost of transportation has been indicated in the invoice without any break-up for the forward and return journey, normally it should be accepted as the cost of transportation from the place of removal to the place of delivery. | As per Rule 5 of the Valuation Rules the actual cost of transportation from the place of removal up to the place of delivery is only to be excluded. If the assessee is recovering an amount from the buyer towards the cost of return fare of the empty vehicle from the place of delivery, this amount will not be available as a deduction. Therefore, unless the assessee specifically mentions in invoice that the transportation charges do not include such charges for return journey of the vehicle, the deduction of the said cost of transportation will not be admissible. |
F.No. 6/ 36/2004-CX-I