ours is a govt. company,one of our supplier(trader) supplied some iron and steel material against purchase order which was given in all inclusive price mode,nowsulpplier was presented commercial invoice for payment,our field people are insisted for "original for buyer".
in this connection i request to clarify me what is the difference between the above invoices and tax implications and whether we will pass the commercial invioces for payment without insisting original for buyer invoices.
further we are not registerd with excise authorities for utiliasation of CEN VAT Credit,since material was uilisaed by our company only without further manufacturing.
Your query is silent as to whether the supplier is registered with the Central excise authorities either as a manufacturer / first/second stage dealer.
An unregistered dealer can not issue an excisable invoice(referred to as original for buyer in your query). In such an eventuality, the commercial invoice must be passed for payment.
05 September 2009
IT IS NOT OBLIGATORY THAT EVERY BODY HAVE TO BE REGISTERED UNDER EXCISE NET WORK. THERE ARE SEVERAL EXEMPTIONS BASED ON TURN-OVER, PRODUCT, BACK-WARD AREA etc.YOUR COMPANY IS ALSO NOT REGISTERED WITH CENTRAL EXCISE DEPARTMENT AND HENCE YOU ARE NOT ENTITLED FOR CENVAT CREDIT.
IN VIEW OF ABOVE, EXCISE INVOICE BY SUPPLIERS IS NOT NECESSARY IN YOUR CASE. HOWEVER YOU HAVE TO ENSURE THAT SUPPLIER SHOULD SUBMIT YOU TAX INVOICE (UNDER SALES TAX RULES). IT WILL HELP YOU TO PROVE THAT YOUR SUPPLIER IS NOT A BOGUS ENTITY.
REGISTRATION UNDER SALES TAX LAW IS ALSO NOT OBLIGATORY HOWEVER THE PRESCRIBED EXEMPTION LIMITS UNDER SALES TAX LAW IS SO LOW, IT COVERS ALMOST EVERY BODY.
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