Circular No. 492/58/99-CX
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
Subject : Valuation – Maximum Retail Price in case of multi piece packages.
I am directed to say that doubts have been raised as regards charging of excise duty with references to maximum retail price under section 4 A in respect of “multi-piece packages”, on the basis of claim made by certain manufacturers that there is no statutory requirement for declaration of retail sale price on such packages under Standards of Weights and Measures Act, 1976 or any rules made there under.
2. The matter has been examined . multi-piece package has been defined under Rule 2 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 as follows:
“multi-piece package” means a package containing two or more individual packaged or labelled pieces of the same commodities of identical quantity, intended for retail sale, either in individual pieces or the package as a whole;
Illustration: A package containing “5 toilet soap cakes net weight 20g each, total net weight 100 g” is a multi-piece package.
Rule 6 of the aforesaid rules requires declarations of certain particulars to be made on every package intended for retails sale. Retails sale price of the package is one such detail to be declared by a manufacturer/ packer. Further rule 17 (1) provides for declaration of certain additional details in respect of multi-piece packages such as sale price of the multi-piece package and the number of individual pieces of the commodity contained in such packages. However under rule 34 exemption in respect of certain packages have been provided. In particular sub rule (b) to rule 34 provides that the MRP provisions do not apply to a package containing a commodity if the net weight or measure of a Commodity is 10 grams or 10ml or less, if sold by weight or measure. Some manufacturers have claimed that the multi-piece package containing individual pieces of less than 10 grams or 10ml or less, even though the net quantity of such multi-piece package exceeds 10 grams or 10ml would be covered by the above exemption. Hence they would not required to be assessed to excise duty on the MRP prices under section 4A of Central Excise Act, 1994
3. The matter has been examined in consultation with the Law Ministry. The Law Ministry has given the opinion that the exemption under rule 34(b) is applicable to a package containing a commodity and this exemption does not appear to applicable to multi piece packages.
4. Based on the above opinion of the Law Ministry, it is clarified that the declaration of retail sale price of multi-piece packages and individual pieces contained in such multi-piece package (if such individual pieces are capable of being sold separately) is statutorily required under rule 17 (1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977.
5. In view of the above statutory requirements for declaration of retail sale price under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 for multi-piece packages, it is clarified that in respect of multi-piece packages of a commodity intended for retail sale and which are notified under section 4A, they shall be assessed to excise duty under the provisions of section 4A of Central Excise Act, 19744.
6. Trade and field formations may be advised accordingly
7. receipt of this sircular may please be acknowledged.