Excise duty
Bhupendra Dubey
(Querist) 03 October 2011
This query is : Resolved
I work in a trading company which import used metal working machines. Now our company wants to purchase some used machines in india.Our party charges Excise Duty and Party was a user of the machines not reseller.
Will Excise Duty be charge on value basis?
If without taxes value is 31,60,000.00 then after Excise Duty and CST what will be the Total Invoice Value?
Please Reply Earlier
R.Ramachandran
(Expert) 03 October 2011
Dear Mr. Bhupendra,
Whenever a Manufacturer (whom you call as 'user) gets a machinery to his company, he is entitled to take Cenvat Credit of the excise duty paid thereon. 50% in the first year and the balance 50% in the next year.
When such a manufacturer, wants to dispose of any of his machinery, then as per the rules, he is entitled to take only 2.5% of credit for each quarter when the machinery was being used by him, and the remaining credit he has to reverse it.
When he sells the said machinery to you, he can only quote the consolidated price and he cannot charge any Excise Duty on the said value, SINCE HE IS NOT SELLING ANY MANUFACTURED MACHINERY TO YOU. IN FACT HE WAS NOT THE MANUFACTURER OF THE MACHINERY IN QUESTION.
The CST is applicable on the value of the invoice, as per normal procedure.
