Table of Contents
In this article, we will discuss Non-trade cement.
| Cement is an important type of construction material that is necessary for almost all types of civil engineering work. Cement is the main material of concrete technology and construction. Cement can be defined as a binding material having both cohesive and adhesive properties thereby capable of bonding the mineral fragments into a compact mass. |
1. Non-Trade Cement
Cement is sold with two means i.e. trade and non-trade cement.
The manufacturer directly deals trade cement to the dealers and retailers, who alternately deal with the end consumers. It is a better long-lasting method of vending cement since the manufacturer does not own to take the liability for making sales pitches to the consumer directly. The seller obtains incentives to deal with the product.
Under this means, all taxes like VAT, octroi, etc are charged when the consumer purchases cement to develop a home and take it as his property. Here, the purchaser belongs to a house owner or a petty contractor, whose consumption is inadequate.
For example, (200+40 VAT+30octroi+30profit) = 300/- per Bag in which the company gains 30/- and the government makes the remaining 70/- per bag.
Under the non-trade cement, the manufacturer directly deals with the consumer like a construction company for self-usage in projects. Here, the cement is not traded to any third party. Here, the seller is not concerned.
It is most effective for small-scale manufacturers of cement. In non-trade cement, there are no massive overhead costs and for this reason, it is cheap concerning trade cement. This type of cement is purchased in mass volume from the manufacturer by the buyers like realtors, contractors, etc.
Under this way, the company only charges the central sales tax on the commodity, borne by the buyer, and provides a form C, which is typically presented to a builder or contractor since he only constructs the projects and delivers to the owner and doesn’t hold to care for its possession after completing of construction.
Generally, in this case, the purchaser is a contractor or a builder or developer, whose intake is considerably high as in construction projects.
For example, if the price to the company for cement is 200/- with zero profit, the non-trade cement price may be (200+20 tax + 15 profit) = 235/- per bag with the company making 15/- profit per bag and the government is obtaining 20/- per bag as tax.
2. Difference Between Trade and Non-Trade Cement
The difference between Trade and Non-trade cement are as follows:
| S.N | Trade Cement | Non-Trade Cement |
| 1. | The cement dealer buys directly from the cement company and sells also does a retail sale from his shop. | The cement is that which is sold by the manufacturer directly to the consumer. |
| 2. | The dealer is an incentive to sell the products. | The dealer is bypassed. |
| 3. | It is more costly than that Non-trade. | It is more economical than that Trade cement. |
| 4. | All the taxes are paid at the time of delivery. | Taxes can be paid in any month of the financial year. |
