Capital Goods On Rent

This query is : Resolved

Vikas (Querist)
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19 January 2010 We are manufacturers of plastic items. We have moulds and dies that have been used by us but due to new designs are lying idle. We want to give these mould to our sister company / factory on rental basis.

Our factory is situated in Sikkim and the factory who wants to take the mould on rent is in Siliguri, West Bengal. Rent so decided is Rs. 10000/- PM.

How will the excise be treated in Sikkim and Siliguri and also if there is any tax to be taken into cosideration. We have taken full input credit for capital goods in Sikkim.

Thanks and Rgds

Vikas

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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22 January 2010 Duty is payable on removal of excisable goods. The value maybe calculated on COP +10% and duty discharged on the same. The sister unit can avail the credit upto 50% in yr of receipt and balance in the subsequent yrs.