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?

-a-

first stage dealer stage0002ANSWER.png

 

Note:-

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.

-ea-

Q2

What will Manufacturer 2 Prefer

Purchase from Manufacturer 1

or

Purchase from Dealer?

-a-

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

-ea-

 Q3

What should Dealer do to sell his product?

-a-

He can register as First Stage Dealer in Excise

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

-ea-

 

  1. Tax Practical
  2. Practical Excise
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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 .
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