Sale of ex goods from branch / manufac depot

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VIKAS KAPOOR

FINANCE PROFESSIONAL

62 Points Joined September 2009

Dear Sir

We have a plant in vasai ( MH) , from plant we TRF the goods to our variuos Excise Registered Branches on duty paid TRF Invoices. When Branch sold the goods to customer, branch pass on the actual ED recived on TRf Invoices. Plant deposit the ED on rate Diff as per Branch Invoices. This is the normal procedure, what we are having. ( Prov Assess & then Actual Assesment by Manufacturer )

Now somebody adviced us that ED on rate Diff can be paid by branch itself & passed on to the end customer. so that customer can claim the actual modavte ( ED deposited by Plant + ED on rate diff deposited by branch)

Pls give your valuable views on the following points.

1) If Plant deposited the ED on rate diff on the basis of Invoices raised by branches to end customer, then No body can claim the Benifit of ED deposited on Rate Diff,( i.e we are paying more duty but can pass on the benifit for lesser duty. )

2) Can Branch Pass on the duty ( more than recived from Plant ) ,on Which goods are sold to end customer & pay the diff of ED passed on -- (less) Ed Received on Plant TRF Invoice)? how the entries will be posted in RG 23D Register.

3) How branch can deposit the ED on Rate Diff ( Branches are having only dealer Registration )??, if Yes , Pls give procedure / Notification / Any case law for the same.

Your expert advice will be highly oblized

VIKAS KAPOOR

vickykapoor20 @ yahoo.com

Replies (2)

U S Sharma

glidor@gmail.com

21068 Points Joined January 2010

assumed that dealership is taken as depot, and a excise dealer is not entitled to "deposit the duty" he can only pass on the same.

at the time of transaction, dealer is required to inform the manufacturing plant regarding the rate diff, and take a sl no of invoice for final duty, mention the same alongwith the original invoice, and pass the whole duty as ( duty paid under original invoice+ duty paid under supplimentary invoice) in the dealers invoice and issue invoice. duty liability can be discharged at month end by manufacturer for all such supplimentary invoices.

but care should be taken that such transactions are done for total quantity for a specified invoice, if breakup is done and sold at diff transaction prices, then valuation rules will curb you.

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Joined February 2011

Supplimentary invoice is a valid document for cenvat credit. The plant itself can pay ED on differential price and issue supplimentary invoice to depot. And depot in turn can issue supplimentary invoice to customer who can take credit from this document.