Any person who holds stocks of sweetened drinks (Includes Concentrates, powders, gel, extracts or any form that can be converted in to a sweetened drink), electronic smoking devices, liquids and tools for business purposes which are “excess in quantity” and excise tax was not accounted for, the same shall be regarded as a stockpiler and required to register for excise tax. “Excess in quantity” stands for the excisable goods in excess of the person’s average monthly stock level or twice the average monthly selling stock, based on a 12-month average. The check must be done on a product to product basis and if any product falls under “excess in quantity”, the person shall apply for excise registration as a stockpiler and account for tax.

Steps to identify the Stockpiler:

Step 1: Identify the excisable products of the company

Step 2: Compute the 2 month’s average sales quantity (based on previous 12 months sales quantity)

Step 3: Compute the one month average stock (based on   for previous 12 months average stock

((Opening stock Qty + Closing Stock Qty)/2))

Step 4: Assess the Inventory of excisable product as on date of the law came into effect

Step 5: Normal Stockpile of Excise Goods = Lower of Step 2, Step 3 or Step 4

Step 6: Excess Excise Stockpile = Actual Stock as on date of the law came into effect – Normal Stockpile

Step 7: Arrive on the RSP/ DRSP of the product

Step 8: Assess the Rate of Tax (50% or 100)

Step 9: Compute the excise tax due by Step 6 x Step 7 x Step 8