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Excise duty

Srikanth.P (Financial Analyst) (34 Points)

08 January 2017

Hi I am working for a company who is newly manufacturing a consumer product where the product will be sold to the end user directly through online sales and it will also be sold to hotel industries, multinational companies on (not for sale basis) i.e., for own use. My question here is

while raising the invoice should we mention excise duty in the invoice?

We will be manufacturing the product in Unit II and the same will be transfered to Unit I and from there the sales will be happening? what will be the Excise implication in this instance.

Also let me know about the Excise implications if the sale is made directly from Unit I.

Thanks in advance.

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5 Replies

CA Finalist (Student) (192 Points)
Replied 08 January 2017

What is Excise Duty ?
Excise Duty is a Indirect Tax levied on goods specified under Central Excise Tariff Act.

It is levied on Goods Manufactured.

Questions

Does the process you have mentioned amounts to Manufacture ?

Whether goods which you have mentioned are specified under Central Excise Act ?

Points to be noted.

Online sale has nothing to do with Excise Duty.

Since goods from Unit 1 will be transferred to Unit 2 as such it will not have excise implications.

It is assumed goods will not be sold from Unit 1 as such.

If the goods require affixation of MRP under Legal Meteorology Act and also has been notified by central government on this be half. Excise duty shall be levied on MRP less abatement if any.

Situation 2

Goods will be sold from Unit 1 directly.

Excise Duty shall be levied.

Srikanth.P (Financial Analyst) (34 Points)
Replied 09 January 2017

Thank you for the reply.

Questions:

Does the process you have mentioned amounts to Manufacture ? Yes.

Whether goods which you have mentioned are specified under Central Excise Act ? Yes.

But you mean to say that if any manufactured product is sold to the end user we have to make an excise invoice with all the copies (Duplicate for Transporter, Extra Copy as such) and send the same to the buyer.

I just want to know the invoicing procedure for this manufactured product in detail. Can you put some light on it.

Thanks

CA Finalist (Student) (192 Points)
Replied 09 January 2017

Scenario 1

A manufacturer sells good directly to end user.

Product Manufactured does not fall under legal Meteorological Act.(I.e. not notified by central government for MRP )

Manufacturer will have to issue all the invoices showing excise duty separately.

Scenario 2

A manufacturer sells good directly to end user.

Product Manufactured does fall under legal Meteorological Act.(I.e. notified by central government for MRP )

Manufacture will have to issue invoice , however , no need to show excise duty separately.( Since excise duty will be on MRP less abatement)