Calculation of vat in excise invoice

Hi,

We are the manufacturer & we have an order for Rs.1000/-, we recieved some matereial from our cutomer for manufacturing of final product amounting Rs.500/-, while calculating Excise duty i need to consider value of material supplied by customer means Assessable value for Excise is Rs.1500/- and we have calculated VAT on our value of goods ie Rs.1000/- + Total ED (on Rs.1500/-)

Sales                  Rs.1000/-

ED                       Rs.188/-  (12.5%)

Total                   Rs.1188/-

VAT on Rs,1188   Rs.65/-   (5.5%)

Total Invoice Value  Rs.1253/-

But our customer asking that VAT should not be charged on excise duty of the material supplied by them,

Can any one please suggest the currect procedure.

Replies (5)
The calculation is correct.

Hi Ajit Sir,

Thanks for your valuable advise,

Is there any circular or notification in this regards?

Thanks

Malleh

I do not know whether there are any clarifications. However:

VAT is to be charged on sales.
Excise duty is on manufacture.

Sales include excise duty. Hence VAT is charged on the sale value. i e., including excise duty.

Ya I understood,

But my question is whether we need to charges VAT on the portion of Excies duty charged for the value of material supplied by customer.

Thanks.

Regards

Mallesh

Yes you have to charge

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