Originally posted by : kabs
Excise duty is charged on Which Amount?
I mean Excise duty is charged after adding profit.Do we have to charged excise on profit.
Suppose i bring a product X at 5000 rs and then sell it at 6000 rs without doing anything (for a profit of 1000 rs,due to difference in market price), in this case do i have to pay excise duty.If yes then how much? whether on 6000 or on 5000 rs.
or simply forward the excise burden to the buyer for the amount that i have paid while purchasing this product.
One of my friends is doing business in computer system, he has same query.Currently what he is doing is that he added word "system" to the purchased product and then charge excise duty.
1)do excise is charged on the profit?
2)on which amount the duty will be charged if i purchase the product at 5000 and sold it at 6000 with profit of 1000 without doing anything.
3)what about the excise duty in above case if i donot amount to manufacturer?
if you are not manufacturer then you have not to charge any ED,
your sale price would be all inclusive ( including ED /VAT/CST paid to manufacturer) and you dont have to show the ED pasrt seperately in your invlice, unless your customer is not asking for cenvatable invoice under excise.
if the client ask for cenvatable invoice then you have to get regd with excise as dealer, and issue cenvatable invoice, for the duty portion paid to manufacturer in proportionate way, balance situation is same
in a nutshell you have to pay excise on your profit as a trader.