Duty and Tax calculation

[kiran pai]

Dear sir,

While invoicing by a manufacturer first he will charge Central Excise duty on the rate, VAT or CST will charge to that value.  I want to know why the VAT or CST charged on the total value (after excise duty calculation) why not to the basic rate.  If any notification or circular is there please let me know.

Thanks,

Kiran Pai

[YAGAY and SUN]

Central Excise duty will be charges on the assessable value of the intended goods while VAT/CST will be charge on the taxable value of th intended goods.

In VAT Laws, this has been defined in the Section 2 i.e. under definition.  Please check the definition of the sales price in this regard.

AI Summary

Taxable value: VAT and CST apply on the goods' taxable value inclusive of excise, per sales-price definition.
Central Excise duty is imposed on the assessable value of goods, while VAT/CST is imposed on the taxable value or sales price as defined in VAT law; where the statutory sales-price definition treats excise duty as part of the sales price, VAT/CST is calculated on the value inclusive of excise. Consult the VAT definition of sales price and any relevant notifications for precise inclusion rules.