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Urget query ! set off of excise duty ?

CA Abhishek Singh (practice) (2106 Points)

19 July 2012

Hello everyone,

Mr.X purchases goods from manufacturer and he supplies the same to manufacturing companies. on purchases mfr charges him 12.36% of excise duty.

he do not want that company (his clients to whom goods are sold) should know the details of the manufacturer and their price and his margin. he fears that clients will directly contact the manufacturer.

My question:

1. How can he pass the cenvat credit to the company/clients if

a) goods are directly transported from manufacturer warehouse to company/clients place ? and

b) He will receive the goods and then he will transport it to the company/client place ?

2. Any other planning possible in this situation ?

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4 Replies

Arun Kumar Singh (GST Advocate) (15220 Points)
Replied 20 July 2012

Registered Dealer can pass the cenvat credit to the company or client. dealer can do the transit sale.

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Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 20 July 2012

Yes I agree with the above view.

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CA Abhishek Singh (practice) (2106 Points)
Replied 20 July 2012

how can my client get registration under central excise. i have heard about first stage dealer. but suppose my client get registered as first stage dealer then can he show the excise duty paid by him in his invoice so that the company to him goods are ultimately sold can claim the credit of excise duty ?

Ajit kumar Dubey (Taxation Manager) (637 Points)
Replied 21 July 2012

Yes you can pass on the credit by showing the amount of duty paid while procuring the said good from the manufacturer or an Importer. Registration has to be taken under the CENVAT Credit Rule,2004 and Central Excise Rules.