Excise duty on sales tax

This query is : Resolved

BIKASH AGARWAL (Querist)
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24 September 2011 OUR COMPANY IS AN UNLISTED PUBLIC COMPANY. THE COMPANY GET A SALES TAx remission u/s 41 OF THE WBST ACT. THE COMPANY SHOWED THE REMISSION AMOUNT ON THE CREDIT SIDE OF THE P/L ACCOUNT EVERY. AT THE TIME OF EXCISE AUDIT, THEY MADE A SPOT MEMO THAT WHY EXCISE DUTY SHOULD NOT BE PAID ON SALES TAX REMISSION. THEY WRITTEN INTHEIR SPOT MEMO THAT THIS IS THE PART OF THE COST AND EXCISE DUTY SHOULD BE PAID. BUT AS PER SECTION 4 OF EXCISE ACT EXCISE DUTY IS PAYABLE ON PRODUCTION COST + PORFIT NOT ON SALES TAX. SO KINDLY PROVIDE ME ANY CASES ON THIS MATTER TO SOLVE OUR QUERY WITH EXCISE DEPARTMENT.

U S Sharma

U S Sharma (Expert)
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01 October 2011 sales tax remission is capital receipt, if the same is shown in manufacturing and trading account then the department is right to claim the excise duty, as you have treated the same as business income at par with sales.