Excise duty amount

1078 views 3 replies

Sharique Maqbool

Others

56 Points Joined September 2012

Respected CA's,

We have a major concern. We are a trading company and are registered with Central Excise and have a Central Excise number.

Our agreement with the client who is a Steel Manufacturing Company is to supply them raw materials at Rs.30/KG with Transportation but excluding CST & Excise Duty. We are purchasing this particular raw material from our supplier at 26.2/KG on Ex-Works basis and we are paying Excise duty of 12.3%, CST of 2% & TCS of 1% on this 26.2/KG.

Our concern is should we charge our client an excise duty on Rs.30/KG or is it such that we can collect only the same amount of excise duty which we have paid i.e we have to collect 12.3% excise on 26.2/KG.

We want to charge excise duty on Rs.30/KG because if we charge excise on 24.9/KG our client will come to know the price at which we are purchasing and there would be a hard bargain. Please guide on this. Thanks.

Replies (3)

CA Saiyum khan

Practicing CA

690 Points Joined November 2008

As per my interpretaion of exise Law goes you have to collect the same amount of excise duty as you have paid on your purchase. Had you been registered as manufacturer you may have taken the excise on Rs.30. You need to prepare some other way out to face the bargain.

Sharique Maqbool

Others

56 Points Joined September 2012

Thanks for your reply Mr.Saiyum.

If this is true then i think that this law is not appropriate and should need a modification i believe. This can lead to very unhealthy business as your buyer will know at what price your purchasing. Is there any other way to hide this?

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

1st of all, add all your expenses ED/CST/Transport or any incidental expense incurred to yourself towards procurement of goods

2nd add your margin above the cost

3rd you have to make invoice ( commercial ) to buyer on after computation of 2nd level and add VAT/CST on it .

if your buyer is registered with excise, then you have to pass on the duty paid at manufactureing point, you can not add/reduce the duty per unit( kg or ton)

if your client is not registered with excise then you dont need to issue4 centable invoice under excise.