Question on Subsequent Sale - Excise part

Dear All,

 Let me ask you all question through an example. This is with regards to case of Mr A in Karnataka.

Persons involved: Supplier in Maharastra, Mr A in Karnataka, Customer in Uttar Pradesh.

Mr A enters into a transaction with Supplier in Maharastra. He charges him Rs 3,00,000 and excise duty of Rs 24,000 on it. Mr A inturn wants the goods to be moved to Customer in Uttar Pradesh directly. So, he asks Suppler to move it to Customers premises in UP. So the Supplier prepares an invoice wherin the goods are billed in Mr A's name & Shipped to Mr Customer. 

Mr A subsequently raises an invoice on Customer for Rs 5,00,000 and shows 24,000 as excise reimbursable.

The question is, Is it correct on part of Mr A to charge excise only for Rs 24,000 and not on 5,00,000 i.e. Rs 40,000?

Replies (2)

First of all I would like to inform you that you cannot raise a bill of Rs. 2,00,000 margin, which is almost 40%. This will make you liable for under valuation and liable for duty and penalty.

The difference of 5-10% is acceptable and in that case there can be a straight away transfer from Maharashtra to UP and the customer can take credit on the Cenvat invoice issed by the supplier.

Thanks Bashista,

But can you please tell based on what premise have you said that it is undervalued, Can you please elaborate with reference to some case law, section no etc.

 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
11 August 2026
Chartered Accountant

Aviv Global Pvt Ltd

Ahmedabad

CA

View Details
Company
ARTICLESHIP 17 August 2026
Article Assistant

Jain Ankit and Co

Gurgaon

CA Inter

View Details
Company
ARTICLESHIP 01 September 2026
Article Assistant

SGNG & Associates

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 29 August 2026
Article Assistant

RRPM & ASSOCIATES LLP

Chennai

CA Inter

View Details
Company
17 August 2026
Chartered Accountant with US GAAP Experience

Austin Med Solutions Pvt Ltd

Bengaluru

CA

View Details
Company
ARTICLESHIP 07 September 2026
Article/ Paid Assistant

Murali and Sumeet Chartered Accountant

Bengaluru

CA Foundation

View Details
Company
ARTICLESHIP 26 August 2026
CA Article Assistant/CA Drop Out/Accounts Executive

PARV & Co.

New Delhi

CA Inter

View Details
Company
14 August 2026
Article Assistant CA Articleship

Eshwar & Co Chartered Accountants - Nungambakkam

Chennai

CA Inter

View Details