We are IT Infrastructure Service Provider based out of Mumbai.
We are into selling of IT products. While selling the products our customer wants the CENVAT benefit to be passed on to them. So please guide me what are procedures to be done to pass on CENVAT credit to the customer. Also let me know the procedure for Purchase and Sale of the same and the documents required while purchase and sale.
We purchase IT hardware products from our distributor (who in turn imports it). He is not ready to give us Excisable Invoice. So in that case what is the other alternative.
Correct me if i am wrong in understanding.
As we are the trader we can avail and pass out the CENVAT credit to our customers only if:
1. We purchase from the vendor who gives us Exciseable invoice.
2. Or we Import directly where in the Bill of entry should be in our name. Right
Documents Required
What are the documents required when we purchase and what are documents which are to be given to our customer while we prepare Sales Invoice.
Purchase Invoice
While Purhcase we get a Invoice of say eg Product is for Rs 100/- and Duty paid is Rs 15/- so Total Landed cost will be Rs 115/-
Accounting Entries will be as follows right:
Purchase Account Dr Rs 100/-
CENVAT Dr Rs 15/-
Party Cr 115/-
Sales Invoice
While prearing Sales Invoice whether we need add Duty
For Eg. Product is for 110/- (our margin of Rs 10/-)
CENVAT Rs 15/-
VAT 4% Rs 5/-
So Total Rs 130/- am I right or we should not include CENVAT of Rs 15/-
Accounting Entries will be as follows right:
Sales A/c Cr 110/- Rs
CENVAT A/c Cr 15/- Rs
VAT A/c Cr 5/- Rs
Customer Dr 130/- Rs
After preparing Sales Invoice whether we need to pay Rs 15/- to the Excise department?
Please clarify whether what I have understood is correct.
Regards
Bhavesh Thakar - Mumbai
9322401890
CAclubindia
