Cenvat credit for second stage dealer

2622 views 10 replies

Prabhu Kumar

Asst. Manager

25 Points Joined October 2012

HI EXPERTS,

WE ARE TRADERS IN TAMILNADU. WE WOULD LIKE TO PURCHASE A ITEM FROM 'XYZ' IN ANDHRA PRADESH. XYZ PURCHASES THE ITEM FROM SOME OTHER MAUFACTURER BUT DOES SOME BLENDING WORK WITH THE ITEM AND SUPPLIES US WITH TAX INVOICE HAVING E.D OF RS 1020/- PER TONNE AND CST OF 2%.

WE SUPPLY THIS ITEM TO A INDUSTRY (ABC) IN TAMINADU, PRODUCING FINISHED GOODS. THE MATERIAL IS TRANSPORTED FROM XYZ TO ABC DIRECTLY. ONLY THE TAX INVOICE IS IN OUR NAME. WE DOES NOT EVEN STORE THE MATERIAL.

WE PROVIDE OUR BILL TO ABC WITH MATERIAL PRICE AND 5% VAT.

MY QUESTIONS

1) CAN I CHARGE E.D OF RS 1020/- PER TONNE (WHATEVER XYZ CHARGES ME) TO THE INDUSTRY ABC?

2) IF NO IS THE ANSWER FOR 1st QUESTION, THEN CAN I AVAIL CENVAT CREDIT FOR THE E.D AMOUNT OF RS 1020/- PER TONNE PAID BY ME TO XYZ.

KINDLY ADVICE.

Replies (10)

CA Lokesh Pokharna

CA (Ahmedabad Bhilwara Chittorgarh)

4128 Points Joined November 2009

in this case you are a first stage dealer,

you can pass excise on your purchase of these goods to your buyers as it is..

ans1 yes you can charegs e.d.1020

no you need not to avail cenvet credit

Prabhu Kumar

Asst. Manager

25 Points Joined October 2012

IF IN CASE, I DID NOT WANT TO PASS ON E.D TO MY BUYER AND CHARGE HIGHER MATERIAL PRICE WITH 5% VAT, THEN CAN I CLAIM CENVAT CREDIT?

I MEAN IF IN MY INVOICE, I DID NOT PUT ANY E.D. ONLY MATERIAL PRICE AND VAT ARE MENTIONED. IN THAT CASE CAN I CLAIM CENVAT CREDIT FOR THE E.D PAID BY ME TO XYZ?

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

1st of all, traders are NOT AT ALL ALLOWED TO TOUCH THE CENVAT. they can only pass on the duty to next buyer, if they are regd with excise.

excise is the matter of factory of manufacture, and can be claimed by another factory only, the traders has no role in cenvat credit , but they can shift the duty paid by originating factory to the target factory by virtue of registration and issuing cenvatable invoice,

if in chain any unregd dealer get involved, then cenvat credit is lapsed,

for a dealer the price of goods inclusive of ED always. they are not allowed to touch excise duty part.

suresh

accountant

21 Points Joined May 2016

DEAR SIR,

ANY ONE CAN SOLVE MY PROBLE , I AM THE 2ND STAGE DEALER IN TRADING & I AM PUCHASING THE RAW MATERIAL FROM ANOTHER 2ND STAGE DEALER AND I CAN TAKE THE CENVAT CREDIT AND SAME CAN PASS TO OUR MANUFACTURER

PLS SEND THE ANY NOTIFICATION IF OK PLS.

Niraj Kumar Sinha

Sr. Officer SPSIL

648 Points Joined August 2012

No. In this case you can not pass duty.

CENVAT Credit can be passed by Importer, First Stage dealer and Second stage dealer only. Dealer who purchase goods from Second stage dealer, can not pass the CENVAT.

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

upto maximum two stages the excise dealer can issue cenvatable invoice, however manufacturer depot is not counted

Niranjan Toshniwal

7 Points Joined May 2016

Dear sir, I am second stage dealer , can I pass excise duty to end user , will end user get benefit of excise if he purchases goods from me..??

Niranjan Toshniwal

7 Points Joined May 2016

Sir I am second stage dealer, can I pass on excise benefit to end user on my firm billing ?? What will be excise benefit amount ??

Rucha A

Sr. Associate-Audit and Taxation

174 Points Joined August 2012

hi.
yes. the cenvatable invoice can be issued upto second stage dealer. the buyer who buys from such second stage dealer shall be eligible for availing credit which is quoted on invoice.

Niranjan Toshniwal

7 Points Joined May 2016

Hello,

Thanks for your quick response, as mentioned by you second stage dealer can pass excise benefit to end user, so in this terms second stage dealer should not be necessarily the end user.. right ?

Excise benefit will be same as issued by company ?

Does excise invoice format have any information regarding the first dealer ??

Thanks for earlier update..