Para 3.23.11 — MSO (Audit)
Original Rule Text
3.23.11 For computing the net proceeds of Union Excise Duties, it is necessary to ascertain the net realisation, i.e. gross revenue less refunds, drawbacks, etc., and to deduct therefrom the cost of collection consisting of direct and indirect charges. The net realisations in respect of sharable duties and duties wholly assigned to the States will be ascertainable from the accounts which present separately the gross realisations as well as the refunds and drawbacks paid under the minor heads for each type of sharable duty and duty wholly assigned to States. The direct charges and indirect charges are determined and distributed among these duties in accordance with the principles that may be prescribed for the purpose.
What This Means
To compute net proceeds of Union Excise Duties for distribution to states, auditors must start with gross revenue, subtract refunds and drawbacks to get net realisation, and then deduct collection costs (both direct and indirect). The accounts separately present gross realisations and refunds for each type of sharable duty, making it possible to track them individually.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Key Points
- 1Net proceeds = Gross revenue minus refunds/drawbacks minus cost of collection
- 2Collection costs include both direct charges and indirect charges
- 3Accounts present sharable duties separately from non-sharable duties
- 4Refunds and drawbacks are shown under minor heads for each duty type
- 5Distribution of costs among different duties follows prescribed principles
Practical Example
While certifying excise duty proceeds, the audit team finds gross collections of Rs 50,000 crore under a sharable duty head, refunds of Rs 2,000 crore, and collection costs of Rs 1,500 crore (Rs 1,000 crore direct and Rs 500 crore indirect). The certified net proceeds would be Rs 46,500 crore, which forms the pool for distribution to states.
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.
Frequently Asked Questions
What is the difference between direct and indirect collection charges?▼
Why are refunds and drawbacks deducted?▼
This explanation was generated with AI assistance for educational purposes. Always refer to the official gazette notification for authoritative text.