Please suggest on excise transaction

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 September 2011 1) We are ABC Pvt Ltd. registered under central excise for manufacturing division. We have received a order from BBC Pvt Ltd for manufacturing XYZ which includes product X & Y as raw materials and our offer value is of Rs 500000/-(we have not consider cost of product Y as it is going supplied on free basis by BBC pvt ltd which is costing to Rs 550000/- because BBC Pvt ltd has a rate contract with his supplier and he gets product Y at discounted rate has compared to other suppliers). So how this transaction will be done without violating the excise rules.
2) Same as above Question no 1 only difference is we have received order from BBC Pvt Ltd. but Consignee is XYZ Pvt Ltd which is a SEZ Unit and excise duty is not applicable under ARE 1 which we will receive from XYZ. So how this transaction will be done without violating the excise rules. how to proceed with transaction if goods are supplied by customer of RS 550000/-.

ADITYA

ADITYA (Expert)
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30 September 2011 You may raise your excise invoice on full value including the cost of material provided by principal, and charge the excise duty accordingly. after getting the gross amount (including Basic + ED) you have to deduct cost of material provided by the principal.

Finished Goods Rs 10,50,000
(5,00,000 + 5,50,000)
Add : Excise Duty @ 10% 1,05,000
TOTAL 11,55,000
lESS : FREE MATERIAL 5,50,000

NET INVOICE AMOUNT 6,05,000