excise duty

[Former Member]

dear all,

i have one doubt on following scenario

1.in factory sales when material are sold to the customer excise invoice created with reference to commercial invoice .so

customer buys the material with excise duty.lets say

material price=100

excise duty =10

-

---

total paid = 110 rupees

in depot sales as excise is already paid ,there is no excise duty levied when selling to customer.

so my question is if customer is not paying the excise duty on the material then if he buys the same material

will he buy it 100 rupees ? if yes, then for same material customer is paying 2 different price. in factory sales and depot sales.

please clarify my doubt

thanks

[Former Member · Accepted solution]

In factory sales - the selling entity is producing the material - so Excise applies on basic price directly.

But in depot sales - the excise duty (e.g. during procurement from Factory) is passed on to customer.

For example - if factory Produces a material and sends to Depot then the factory raises STO Proforma invoice to Depot - say basic - 100, ED - 10, Cess - 2, HE Cess - 1.

Now this excise duties gets entered into RG23D register.

When Depot sells to Customer - in the invoice - the excise duty will be picked up from RG23D register (through the routine attached in Depot sales pricing procedure). Also it is necessary to link to the mother invoice (pro-forma invoice) - we need to capture excise before billing - so the reference entry in RG23D is easy to pick.

If depot sells it for 100/110/09/etc. irrespective of the base price excise duty will be 10.

This is the reason why - the excise rules say that the STO price should be the highest price.

So Excise duty applies in both cases.

Thanks

[Former Member]

dear chak,

many many thanks for clearing my doubt.thread is closed

[Former Member]

Hello Ranjan,

In depot sale what customer pay will be inclusive of Excise duties. Customer will be given a depot invoice which contains details of incoming invoice. Based on the depot invoice customer again can get CENVAT credit.

Regards,

Satya