Comman invoice for Excise and Service Tax

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Devendra K. Sharma

SERVICE

21 Points Joined June 2007

HI ALL

I AM WORKING IN A MANUFACTURING CO. AND THE COMPANY IS REGISTERED IN BOTH EXCISE AND SERVICE TAX DEPTT. MY CO. IS ENGAGED IN REPAIR AND RECONDITIONING OF INDUSTRIAL MACHINERY.

IE OUR COMPANY RECD. DAMAGED MACHINERY OR MACHINERY PARTS FROM ITS CUSTOMERS (COMPANY) AND REPAIR THE SAME. IN THE REPAIR PROCESS THERE WAS 60% OF MATERIAL INPUT AND 40 % MACHINING CHARGES WERE CHARGES FROM THE CUSTOMER CO. FOR REPAIR OF MACHINERY OR / MACHINERY PARTS.

THE QUESTION IS CAN WE ISSUE AN INVOICE FOR BOTH MATERIAL INPUT SALE AND MACHINING CHARGES IN ONE INVOICE AFTER CHARGING EXCISE DUTY AND VAT ON MATERIAL VALUE AND SERVICE TAX ON MACHINING CHARGES (IE LABOUR). OR ISSUE A SEPERATE INVOICE FOR MATERIAL AND MACHINING CHARGES AFTER CHARGING EXCISE AND VAT ON MATERIAL AND SERVICE TAX ON MACHINING.

IF WE ISSUE ONE INVOICE FOR BOTH MATERIAL INPUT AND MACHINING CHARGES WHAT PROBLEM WE HAVE TO FACE IN FUTURE WITH DEPTT. OF EXCISE AND SERVICE TAX

PLEASE SUGGEST LEGAL OPINION IN THIS REGARDS

THANKS IN ADVANCE

Replies (2)

Rajesh Kumar

Advocate- Tax

7806 Points Joined December 2008

There can be common invoices, there is no problem in this regard.

The complexity of business/transaction is increasing. The accounting system must be able to capture this complexity; so that as and when any query arises from any of numerous government agnecies, it can replied satisfactorily.

U S Sharma

glidor@gmail.com

21063 Points Joined January 2010

gross job is restoration of damaged machine ....................

scenerio 1 ............. use seperate bills for spare parts , charge excise / vat, seperate bill for maintanance and charge service tax.

scenerio 2 ............ as mentioned by you, direct transfer of inputs to end user and processing + maintance to be billed and service tax charged.

if u opt for scenerio 2 then get ready for scenerio 3 also

scenerio 3 ........... audit party consider the damaged machine as input and ask u to pay full excise duty of new machine value ..................... as reconditioning of damaged machine amounts to manufacture !!

seperation of accounts from one to another department always prevents unwanted litigations.