Upgrad LLM

excise duty on international billing, local delivery


Hello,

I have a query regarding whether my company should charge Excise & VAT on sales.

Situation
Our company has been in partnership(only verbal) with another company based in Hong Kong who will place order for our products (Garment accessories), but expect us to deliver goods in India to one of the garment exporter.

Billing
The customer bills the garment exporter directly, and we bill the customer for our sale. 

Problem/Issue
Since the goods are not leaving the country, I am told that I need add Excise and Vat to the price. However, since I am billing to a foreign company who is not registered in India, they cannot claim back the tax or pass it on, and this becomes a cost to them(approx 17.36%). This makes us less competitive and the customer has decided to not sourcing from us, and is rather directly shipping from China/HK.

Could I know whether it is possible to avoid this cost for the customer? 

Our products are going to be attached on the garments and eventually exported by the exporter. Does this help in claiming that our product is of export?

 
Reply   
 
Lawyer in Hyderabad.wats app no.9989324294

The entire design of VAT with input tax credit is crucially based on documentation of tax invoice, cash memo or bill. Every registered dealer, having turnover of sales above an amount specified, needs to issue to the purchaser serially numbered tax invoice with the prescribed particulars

 
Reply   
 


Excise & Service Tax Consultant

The goods has not been physically exported so, you can not take the benefit of excise duty and sales tax. All the duty will be applicable.

 
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