Excise duty on Supplementary Invoice

[Guest]

Dear All,

We are a manufacturing unit & after make finished goods we have transfer in our registered manufacturer depot for further sale to customer as per Rule 7 & in depot maintain RG23D register and on time of sale duty pass on to customer. Now my query is due to price increase we have issue a supplementary invoice to customer from our depot, in case please tell us excise duty is applicable or not & if yes than how can we charge excise duty from customer on supplementary invoice?

[KASTURI SETHI]

You will have to pay Central Excise duty on the differential amount on account of escalation in prices.You may charge differential duty on the invoice in a routine way. Mention also invoice no. and date against which supplementary invoice is being issued. Do you require more information ?

[Guest]

Dear Mr. Kasturi Sethi

We have to maintain in RG23D register in our depot & just duty pass to customer which we have received from our mfg unit. So please tell me how can we charge extra excise duty from customer & pay to department? We have to run our mfg depot like as a first stage dealer.

[KASTURI SETHI]

What I understand you have stock transferred your products to your depot on payment of Central Excise duty. Now you will raise supplementary invoice due to escalation in prices. (I think retrospectively ?). First you will pay duty on supplementary invoice addressed to your depot which is registered as dealer for passing on cenvat credit. On the supplementary invoice you will mention original invoice no. date in respect of which price is increased and duty has to be paid. Thereafter you can mention in the invoice to be issued from depot. Interest has to be paid from your pocket.

[Ganeshan Kalyani]

What I understand from the query is that the goods is first removed to depot after paying excise duty. The value of the goods kept same and it is sold to customers. Thats is the reason that queriest is asking how to make excise duty on escalated price. Please correct if my understanding is wrong. Therefore as per Kasturi sir reply in case of escalation of price first differential excise duty to be paid by factory and subsequently the depot should pass on to the customers.

[KASTURI SETHI]

Sh.Ganeshan Kalyani Ji,

Sir, you have rightly understood. We are on the same track. At the same time problem of querist should be solved.

[Ganeshan Kalyani]

Yes sir the queriest should sign off this query if he got his query resolved.

AI Summary

Excise duty on supplementary invoice: differential duty must be paid by the manufacturer and referenced to the original invoice. Excise duty is payable on the differential value when a supplementary invoice is issued for price escalation after goods were transferred to a registered manufacturer depot. The manufacturer must pay Central Excise on the additional taxable value, reference the original invoice number and date on the supplementary invoice, and bear any interest for delayed payment; the depot may then reflect the differential duty when billing the customer and maintain RG23D records to pass duty or credit.