Excise duty exemption limit against turnover

20383 views 13 replies

Prasad Shah

Managing Partner

65 Points Joined December 2012

We are a manufacturing company dealing in variety of Minerals which are all non-excisable.

We are doing a small time trading activity in excisable material.

Our Total Annual Turn Over is Rs.20 Crores and we are registered under SSI. But the excisable goods turnover is only Rs.50 Lakhs.

We are under impression that, if Excisable Goods sales cross over Rs.1.5 Crores, then only we come under excise. but we have not crossed till now or even in any of previous financial year.

Now Excise Dept is asking us to pay penalty of Rs.8 Lakhs for year F.Y.2013-14, since we purchased Excisable goods with paying excise duty, but sold without charging excise duty to our clients.

We are getting dual opinions from lots of experts. We do not know exactly what to do.

Can somebody please help us in this matter. Whether we can claim exemption or we have to pay excise penalty.

Thank you.

Replies (13)

Prashant Kini

Article Assistant

154 Points Joined December 2008

Liability of excise duty arises only when u manufacture excisable goods in India and not when u carry on a trading activity. Check with the department as to the reason for issuance of show cause notice. Notice may be wit respect to some other mfg activity carried on by ur client

CA Sanjay Bag

CHARTERED ACCOUNTANT

3350 Points Joined December 2011

Yes, Prashant is absolutely right, if you are not manufacturing excisable goods so there is noo question of apying excise duty.

Mahavir Shah

Chartered Accountant

70 Points Joined November 2011

Agree with both of u

CA PANKAJ

business consultant

288 Points Joined March 2014

Yes I aggree with Mr. Prashant

K J UDAYA KUMAR PILLAI

Proprietor

38 Points Joined December 2012

As per act only incase you are a manufacturer you need to pay

Anil Gyanchandani

Partner

27 Points Joined January 2014

If u r not a manufacturer, but a REPACKER of any Excisable Goods, putting your own lable / trade name & turnover is more than 1.5Crore in any financial year, then u r liable to charge CenVAT to customer and pay differential Duty to Dept.

Prasad Shah

Managing Partner

65 Points Joined December 2012

We are manufacturing minerals, which are not excisable. We did small manufacturing of some excisable goods about Rs.20 Lakhs and for balance Rs.30 Lakhs we did pure trading only. When we purchased excisable goods from a manufacturer and we sold to our customer without charging excise duty. We already have excise registration since last 18 months, but we filed nil return only.

So if I can summrize, our total turnover is Rs.20 Crores for 2013-14, out of which Rs.19.5 Crores worth goods were not falling under excise category. Rs.20 Lakhs worth goods we manufacturerd which comes under excise and Rs.30 Lakhs worth excisable goods we purchased and resale.

Where do we stand??

Rishi Agarwal

Senior

56 Points Joined February 2014

that is why u got notice from the department. even small or little bit manufacturing falls under the definition of manufacture and is sufficient for levying excise duty.

Neeraj

student

44 Points Joined March 2008

Apart frm manufact.. excse is also to be paid by first stage and second stage dealr.. I thnk they have covered ur client there..

Neeraj

student

44 Points Joined March 2008

Apart frm manufact.. excse is also to be paid by first stage and second stage dealr.. I thnk they have covered ur client there..

Hitesh Patel

Student CA IPC / IPCC

34 Points Joined February 2014

My client is doing trading activity(dealer) and he doesn't fall in excise duty but goods were its manifactured is chargable to excise duty so he can't claim.. Now he want to setoff excise duty wht he should do... wht is the cost required for registration. . plz suggest me frnds wht to do...

jafer

studies

194 Points Joined March 2009

Hello Prasad,

While calculating Exemption limit, Zero duty and non excisable goods should be excluded. I guess, you are right in your way, but again you can check with some good experts.

All the best.

CA Hemant Agarwal

JOB

26 Points Joined July 2014

In our case, previous audit report of my client there is turnover of Rs.1,58,08,029.00.And in current FY 2014-15 their turnover become Rs.around 94,00,000.00. Whether they are liable to pay excise duty.They are manufacturing Iron Plate.