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Pay excise after checking delivery date

delhi Updated: Feb 28, 2010 01:42 IST

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Upset that the television set that you coveted or the A/C that you intended to buy has become expensive on account of the increase in excise duty imposed by the FM on Friday?

You still had a chance to get it at the pre-budget price, provided you moved in quickly and buy the stock that was already in the market or the retailers’ showroom. The fresh duty imposts became applicable only on those goods that left the manufacturers’ premises from the midnight of February 26. So the stocks lying with the dealer were still available at the old rate. However, there is every possibility of the retailer charging the new price on goods that did not attract the revised duty and pocketing the extra money. So, you need to be extra-cautious. If you are buying a car or a consumer durable, it would be better to ask the dealer to show you the invoice that indicates when it left the manufacturer’s premises and also the duty (eight or ten per cent?) that it attracted.

The across-the-board increase of 2 per cent in excise duty effected on all excisable non-petroleum products and the cascading effect of the petroleum price hike will translate into higher prices in respect of almost all household goods. So brace yourself for more woes on the price front. However, you also need to make sure you are not being charged post-budget rates on pre-budget stock. So when you do your grocery shopping, look at the MRP on the packages and ensure that the retailer has not put a new sticker, indicating a higher MRP. In fact, under the Weights and Measures (Packaged Commodities) Rules, this is not permitted, except when prices fall. Even then, the sticker indicating the lower price should be stuck in such a way that it does not obliterate the higher price.

I have an interesting question here from a reader:

Question: Kishore Malik: the dealer with whom I had booked a car before the budget tells me I have to pay more now as the excise duty has gone up. He says the price is determined on the rates as applicable at the time of delivery. Is this correct? If not, what do I do?

Answer: As I have already said, whether or not the new duty will apply to your car will depend on the date it left the factory. You will have to check that. In case of Tata Engineering Locomotive Company and Sakti Automobiles Vs John Jacob (RP no. 1079 of 1998, decided on April 4, 2006) the central question was if the dealer was right in charging an additional amount of Rs 38,344 from the consumer (who had booked his car in 1996) on the ground that the excise duty had gone up.

Here, to determine if new tax rates were applicable to the car the National Consumer Disputes Redressal Commission asked the manufacturer and dealer to give the exact date on which the car left the factory. On learning that it had left prior to the increase in excise duty, the Commission held that the extra amount collected from the consumer was illegal. The Commission made it clear that demanding or collecting excise duty on goods that did not attract it constituted an unfair trade practice.

So if the manufacturer has not paid additional duty, then neither he nor the dealer can recover that from you. That would be unjust enrichment of the manufacturer or the dealer at your cost.

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