First stage dealer/second stage dealer

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 November 2013 I have a doubt reg central excise invoice.
I am a dealer having eligibility to raise first stage dealer/second stage dealer invoice.

Here is the transaction:
Manufacturer bills the goods on the name of 'A'(whom I consider as the first stage dealer) and 'A' bills the goods on the name of 'B'(whom I consider as the second stage dealer).'B' bills the goods to 'C'.

My doubt is, is can 'B' raise an excise invoice to 'C' and is 'C' eligible to raise the excise invoice to another trader or manufacturer who can avail the excise duty benefit?

Kindly answer my question if you are 100% sure and clear and also plz give me the details of the Rule Number or any website where the central excise department have stated the above transaction as valid and legal.

Sumit Grover

Sumit Grover (Expert)
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05 November 2013 Yes, the first/second stage dealers("A" and "B" in your example can issue excise invoice---- rule 11(7) of central excise rules..... However, "C"can't raise xcise invoice, since hez nt a manufacturer or first/second stage dealer...

Querist : Anonymous

Querist : Anonymous (Querist)

18 November 2013 Thank you Sumit for the clarification.

If "C" is having central excise registration, is it possible that "C" can issue central excise invoice received from "A" and "B"?

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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24 July 2024 In the scenario you described involving central excise transactions in India, here are the clarifications based on the typical process and rules:

1. **Role of Dealers (A and B):**
- A, who is considered the first stage dealer, receives goods from the manufacturer and sells them to B.
- B, who is considered the second stage dealer, buys goods from A and sells them to C.

2. **Can B raise an excise invoice to C?**
- Yes, B can raise an excise invoice to C. In this case, B will issue an invoice that includes the excise duty charged on the goods. This invoice will typically mention B's excise registration details and comply with central excise invoice rules.

3. **Can C raise an excise invoice to another trader or manufacturer?**
- No, C cannot raise a central excise invoice to another trader or manufacturer if C is simply a buyer of goods. C's role in this transaction is to purchase goods from B. C can, however, claim credit for the excise duty paid on the goods purchased from B, if C is eligible under the Central Excise rules.

4. **Central Excise Invoice and Documentation:**
- The central excise invoice issued by B to C should comply with Rule 11 of the Central Excise Rules, 2002. This rule specifies the format and details required in a central excise invoice.

5. **Central Excise Registration of C:**
- If C is registered under Central Excise, C will maintain records of the invoices received from B and use them for claiming input tax credit (ITC) or other benefits as per Central Excise rules.

6. **Legal and Regulatory References:**
- For detailed information on central excise rules and transactions, you can refer to:
- The Central Excise Act, 1944
- Central Excise Rules, 2002
- Notifications and Circulars issued by the Central Board of Indirect Taxes and Customs (CBIC)

It's important to note that while B can issue an excise invoice to C, C's ability to issue further excise invoices would typically depend on whether C is engaged in manufacturing or deemed manufacturing activities that require C to issue such invoices. Generally, if C is only buying and selling goods without further manufacturing, C would not issue central excise invoices but would maintain proper records for compliance and claiming benefits under the law.

For precise legal interpretations and specific guidance tailored to your business operations, consulting with a qualified tax advisor or legal expert familiar with Indian central excise laws would be advisable.