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Excise duty on trading sale

SKR (Accounts Officer) (24 Points)

02 March 2009

We are running a manufacturing unit with license. We would like to know the rules if we want to do trading sales. We want to know the full procedures to be followed with documentation as well.

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23 Replies

Sachin (Chartered Accountant) (419 Points)
Replied 02 March 2009

Dear SKR,

You can do Trading but for it, you should be maintained separate books of Accounts otherwise you will be pay to tax as per CENVAT Credit Rules, 2004. please write a email sachinagarwalcallb @ gmail.com

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 02 March 2009

Earlier, permission was required to trade from the manufacturing premises. Now no such permission is required. You can do trading from the manufacturing premises.

All that you have to do is to maintain separate records of trading and manufacturing activities.

Rajeev Nair (Finance Professional) (510 Points)
Replied 03 March 2009

Rajeshji, please clarify., whether ther permission is granted for Excisable Goods Trading[ Like 1st / 2nd stage ] or Non-excisable goods are also allowed to trade for a manufacturer producing goods under E.C.C registration. from the same premises by maintaining separate records and inventory...

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 03 March 2009

If you trading in goods, on which you are not required to pay any duty or pass on any duty, no permission is required. The only thing you need is proper accountal as these sales will reflect in your total sales, and the department may seek clarification on those sales.

If you want to pass on credit as Dealer, you need to be registered as dealer.

Ram kr. (Buisness) (883 Points)
Replied 04 March 2009

Dear Sir,

We are manufacturer. Can we trading sale any excisabe goods with or without availing cenvat credit on such inputs which we want to trading sale. Please tell the notification in which no such permission is required for trading sale by any manufacturing unit.

Thanks

Ram Kishan

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 05 March 2009

Just to answer, "please tell the notification in which no permission is required".

It is surprising when you ask for a notification as an evidence of negative. There cant be a notification saying no permission is required for breathing or no permission required for doing business.Under common law system, everything is allowed unless until it is prohibited by law. Law does not permit you do anything. Whatever has not been prohibited by law, is permissible in law.

There is no law prohibiting you from trading from manufacturing premises. Thus trading for manufacturing premise is permissile.

Ram kr. (Buisness) (883 Points)
Replied 05 March 2009

Dear Sir,

Thanks for clerification. Pl. tell can we made Trading Export without payment of duty if we can not cenvat credit on Trading Purchase. Our Excise Inspector did not allow Trading export without payment of duty. Please suggest any procedure or any Logic.

Thanks

Ram Kishan

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 05 March 2009

You can become a merchant exporter. You are required to be registered with a export promotion council- if that is done you will not be required to give any bank guarantee with the export bond. You can give the bond with your jurisdictional division office or maritime commissioner.

Thereafter you can follow CT-1 procedure for clearance of any export goods from any factory in India without payment of duty.

Ram kr. (Buisness) (883 Points)
Replied 05 March 2009

Dear Sir,

Thanks for your prompt reply.

Ram kr. (Buisness) (883 Points)
Replied 15 March 2009

Dear Sir,

We have purchase finished goods from U.S.A. and sale directly to U.K without coming in Inida. Can we sale these material without payment of duty or with payment of duty . Pl. tell brief rule & regulation in Excise.

Thanks

Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 16 March 2009

Yes, you can sell these goods directly. No excise/vat is payable.

Ram kr. (Buisness) (883 Points)
Replied 14 June 2009

Dear Sir,

1. We are manufacturer and want to cancel Trading Invoice. Does any intimation required to excise department for cancelation the invoice.

2. Secondly we have purchased Trading goods and want to export sale with payment of duty. What will be the duty amount. Should we charged duty amount equal to purchase amount or present rate charged on sale value.

Thanks

amit (Accountant) (25 Points)
Replied 22 June 2009

dear sir,

please tell me what is the process of in trading firm for excise documentation. what type of doucment we prepaier in trading firm if we 100% import and it's sale