In case of stock transfer supplementary invoice necessary

[Asked by Guest]

Dear Sir, we are a mfg co if we had made stock transfer to our depots at lower rate, Further we notice about it now we will pay additional duty for differential price , Our depot is not registered excise then the question of availing credit does not arise say for mrp products so please explain us whether supplementary invoice is necessary to issue or debit note is sufficient, further we are using Sap system then how to debit the duty by issuing debit note to our depots,please explain, please give us any reference regarding this, thanks and regards

[MUKUND THAKKAR]

In such situation you have to raised the supplementary invoice depot wise and paying duty along with interest.

[Kailash Singhal]

d/s

in case of mrp products till goods are sold below mrp rates then central excise duty payment is not required in my view

when goods sold above mrp rates then it will also infringe the act of weights measurement act and central excise law . also in my view excise department can invoke extended period to raise the demand and initiate penalty proceedings etc regards ca kc singhal , silvassa

[YAGAY and SUN]

Dear Sandesh,

Principle of "Nearest point/time of sale"" would apply in this matter. You would be required to pay the differential duty along with interest at applicable rate. We do agree with the replies submitted by Mr. Mukund and Mr. Kailash.

Further, we want to add that SW Act is replace by Legal Metrology Act, 2009.

Regards,

Neelam Taneja (Executive Consultant),

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Differential excise duty: supplementary invoices required to correct stock transfer valuations and discharge duty with interest.
Liability for differential central excise duty arises when stock transfers were made at lower values; the transferor must pay the additional duty with interest and, because depots are unregistered, the depots cannot claim input credit. Practitioners advise issuing a supplementary invoice depot wise to record the revised valuation and enable duty discharge rather than relying solely on a debit note. The nearest point/time of sale principle governs valuation; under MRP rules, selling above MRP can attract legal metrology and excise enforcement. The Standards of Weights Act has been superseded by the Legal Metrology Act, 2009.