Whether CST is leviable on Excise duty when credit taken

I think CST is to be charged on the excise duty also.

Originally posted by : Satheesh Kumar.C
	Whether CST is leviable on excise duty  when cenvat credit is taken by the buyer and seller ?   I have got some reference case laws in this regard and  I can't get  full details of them in All Indian courts'  web sites.  Case laws - The Excise duty is includable in 'Sale Price' - Mohan Breweries & Distilleries Ltd Vs CTO 1997(6) SCALE 13=1997 AIR SCW 3589=(1997) 107 STC 212 = JT 1997(8) SC 36 = AIR 1997 SC 3497 Dy  CST Vs Hindustan Petroleum Corporation (2000) 118 STC 311 (SC)   The Excise duty is NOT includable in 'Sale Price' Excise duty is not includable in sale price when excise duty is refunded to MFR under Central Govt scheme - Indian Aluminium Cables Ltd  Vs  CST (1999) 115 STC 161 (ALL HC) Tax paid by buyer when liability is of seller - Tax and duty paid by buyer is includible in 'sale price' if liability to pay the tax / duty / cess is on the seller.  However, if liability to pay such tax / duty / cess is on the buyer, the same cannot be considered for purpose of 'sale price'    - P.V. Beedies P ltd Vs State of Mysore (1963) 14 STC 139 (MYS HC) - G M S Parkash Rice Mills Vs. State of PUNjab  (1993) 91 STC 398 ( P&H HC FB).

CST or VAT is chargable in clearance value based on the excise invoice, irrespective of the fact that duty is paid or not. 

when the buyer prodcures the goods under any bond/obligation without duty and seller is asked to charge the VAT/CST, he will not add the excise duty on that transaction, as the obligation is meet by the buyer other than duty payment at the time of clearance.

But when the duty is charged by the seller, then CST/VAT is payable on excise duty also, as excise duty is added to value for CST/VAT purpose, and here its irrelevent that the buyer takes input credit or not. 

CST IS LEVIABLE ON INTER STATE SALE ON VALUE OF GOODS REMOVED FROM PLACE OF REMOVAL.VALUE OF GOODS MEANS BASIC VALUE + EXCISE DUTY & CESS AT APPLICABLE RATES + FREIGHT IF ANY. THERE IS NO BAR TO AVAIL CENVAT CREDIT ON CST SALES, EITHER BY BUYER OR SELLER. AVAILMENT OF CENVAT CREDIT IS GUIDED BY CENVAT CREDIT RULES'2002 & 2004 & CST BY CST ACT'1956.

Pls read the Circular No.943/04/2011-CX  / dt.29.04.2011   of The Excise Dept, 

Link - https://www.cbec.gov.in/excise/cx-circulars/cx-circulars-11/943-2k11cx.htm

 

 

in which,  in sl.no 9, questioned as,

 

Are the taxes and year end discounts to be included in the sale price and cost of goods sold while calculating the value of trading?  

and answered as,

Generally accepted accounting principles need to be followed in this regard. All taxes for which set off or credit is available or are refundable/ refunded may not be included. Discounts are to be included. 

and,even, as it is taxed under CST Act,  why does not apply to the meaning of 'sale price' ,  pls read ' Sec.2(h) and 2(J)  of CST ACT 1956 for sale price and turnover.  link - https://www.indiankanoon.org/doc/1645178/ .  All you know that  the sale price, including excise duty, cess,tax will be treadted as purchase price when there is no set off made or credit availement.  When we maintain separete ledger account for Cenvat account in selling and purchasing point,  CST on sale price will show the difference amount of  levied tax on excise duty if  calculation made on the total amount of purchase account.  Is anything explained in accounting standerd / principle adopted sofar ,as for  this instance, as said in the Excise Circular.   

Thank all of you.

 

sl no 9 is related to "trading" not for valuation u/s 11 or 4 of CE rules