Excise invoice clarifications

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 January 2014 Dear sir, we are automotive parts manf co.for our process we purchased some local parts with VAT and now i want to sale the same with raising excise invoice,is this right way if we included the VAT purchase parts? if not how to raise invoice for vat parts and excise parts or seperate invoice need to creat for each

plz suggest me

Ajay Goswami

Ajay Goswami (Expert)
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16 January 2014 You need to generate Excise gate pass with value of Item which you are rtemoving from the Factory. On total of Excise & materials value u need to impose VATalso

Querist : Anonymous

Querist : Anonymous (Querist)

16 January 2014 But the issue is i bought the material locally and that to vat parts not excise parts and i want to sale the same with other excisable parts can i sale vat charged parts with excise parts? if so payment duty is the cost to me for vat parts then its un-neccessary burden to me

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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21 July 2024 If you are manufacturing automotive parts and you have purchased some components locally with VAT paid on them, here’s how you should handle invoicing and excise duty:

### Handling VAT Parts and Excise Parts in Invoicing:

1. **Separate Invoicing for VAT Parts and Excise Parts:**
- It is important to separate VAT parts (non-excisable) from excise parts (excisable) when invoicing your customers. This distinction is necessary because VAT and excise duty are two different types of indirect taxes.

2. **Invoice for VAT Parts:**
- For parts that you purchased locally and VAT was paid on them, you should raise invoices that clearly mention VAT as applicable. These invoices should not include excise duty because VAT has already been paid on these parts when you purchased them.

3. **Invoice for Excise Parts:**
- For parts that are manufactured by you and attract excise duty, you should raise excise invoices. These invoices should clearly mention the applicable excise duty rate and amount, along with all other required details as per excise rules.

### Important Considerations:

- **Separate Identification:** Ensure that VAT parts and excise parts are clearly identified and segregated in your accounting and invoicing systems.

- **Cost Considerations:** You are correct that including excise duty on VAT parts would impose an unnecessary burden because excise duty is levied on manufacturing, not on the sale of goods that have already attracted VAT. Therefore, invoicing separately ensures that the correct taxes are applied and avoids any double taxation.

- **Compliance:** Adhere to all relevant tax laws and regulations regarding invoicing, VAT, and excise duty. Failure to comply can lead to penalties and legal issues.

### Procedure:

- **Create Separate Invoices:** Develop a system where you can easily distinguish between VAT parts and excise parts. This may involve different templates or software settings for invoicing.

- **Educate Customers:** Clearly communicate to your customers which parts attract VAT and which attract excise duty. This transparency helps in smooth transactions and compliance on their end as well.

By following these guidelines, you can ensure that your invoicing practices are compliant with tax regulations and efficient for your business operations. If you have specific doubts or require further clarification, consulting with a tax advisor or accountant who specializes in indirect taxes like VAT and excise duty would be beneficial.