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Suppose in Last case, Manufacturer 1 sells to Dealer who sells to Manufacturer 2

Manufacturer 1---->Dealer---->Manufacturer 2  

Assuming Dealer does not earn any Profit and works at No Profit no loss

In this case,Excise will be charged as follows



Sale by Manufacturer 1 to Intermediary Dealer  - Concept of First Stage Dealer

What is Excise Duty Payable in this case by all 3?


first stage dealer stage0002ANSWER.png



Dealer cannot charge Excise on Sales as he is not doing any Sales

He has to sell at RS 176000(160000 Purchase Price+16000 Excise Duty) to work at no profit no loss.



What will Manufacturer 2 Prefer

Purchase from Manufacturer 1


Purchase from Dealer?


Manufacturer 2 will prefer to purchase from Manufacturer 1 directly as he has to pay less Excise Duty

Even if Dealer is working at no profit no loss,still his goods will not be sold



What should Dealer do to sell his product?


He can register as First Stage Dealer in Excise

In that case,he can charge Excise Duty on Sales Bill



  1. Tax Practical
  2. Practical Excise
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About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 6 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .