Clarification on way of Charging Excise Duty by our Consignee Agent

[RAM SHARMA]

Respected Sir,

 We are Registered manufacturer in Central Excise. We have charged excise duty as per Central Excise Rule and sale of our goods all over India to our various Consignee Agents. Our Consignee Agents raise same rate of invoice to our retailer customers on following type of tax procedure.

 Gross Value Rs. 10000/-

Add : Surcharge in lieu of excise 6.18% Rs. 618/-

Add : Vat 5% on Rs.10618/- Rs. 531/-

Add : Surcharge on Vat 5% Rs. 27/-

__________

Grand Total Rs. 11176/-

__________

Now the Excise and Taxation Dept. Haryana has sought an explanation from our Consignee Agent regarding the surcharge which are adding by Consignee Agent own bill in lieu of excise as prescribed in our Invoice.

Dept. is of opinion that as a Consignee Agent (Trader not a Manufacturer) can not charge this surcharge on their Invoice.

Kindly issue something documentary to substantiate that what we are doing is as per the Govt. norms.

Thanks

[YAGAY andSUN]

First of all, HVAT Department cannot raise objection since they are getting tax on the taxable amount (Rs. 10618/0-)which includes the surcharge in lieu of Central Excise Duty.  HVAT Department has no jurisdiction to raise such questions/queries.

Ask them, Consignment agent is not charging the Excise duty, he is just passing it on to the ultimate customers.

AI Summary

Surcharge in lieu of excise: treated as pass-through in invoicing, VAT computed on inclusive taxable amount. Manufacturer invoices include a surcharge in lieu of excise that consignee agents pass to retail customers. The VAT authority cannot object where VAT is computed on the taxable base that includes the surcharge, since the consignee agent is passing through the excise-related component rather than independently charging excise.