Excise duty charge

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 June 2014 Query:
Dear Sir,
My query is,......
A manufacturing company is selling a product to its customer on 45 days credit. The customer at the time of supply of goods itself has asked for 90 days of credit stating the company can charge interest for balance 45 days and has asked for proforma invoice from the company.

So on the value of goods excise duty and sales tax is charged (Since customer belongs to different state CST is levied). on the arrived value, the company is calculating interest @12% for 45 days.

My question is whether on the interest component also sales tax and excise duty to be charged.

Kindly advise.

Please quote the relevant provision or the case law.

Thanks in anticipation.

Regards
Yogesh

Krishna

Krishna (Expert)
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17 June 2014 no, not as such required to charge

Querist : Anonymous

Querist : Anonymous (Querist)

17 June 2014 Can you explain with leadgr Posting on both side books of above transaction.

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Rupesh Jain

Rupesh Jain (Expert)
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19 June 2014 if your are charge the intt. with in sale price then only sale entry you book. due to intt amount already include in sale amount.

if intt not part of sale price then

entry:

party a/c

to sales
to intt received from customers
to vat payable
to excise durity payable

buyer party:

purchases a/c
intt on purchase a/c
cenvat a/c
vat input/cst(on purchases) a/c
to supplier a/c