Excise duty on Scrap sale of Corrugated box & Rate

This query is : Resolved

Ashish (Querist)
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12 February 2011 Hi,

We have imported the Excisable material in Corrugated box(Packing chagres in corrugated box is not sepretly shown in Invoice). After import the corrugated box become useless so we are selling as a scrap. Please clarify that the sell of Corrugated box as a scrap is excisable or not and also mentioned if excisable than at what rate (4% or CVD rate).

Thanks in Advance
Ashish Gupta

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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12 February 2011 First you confirm , whether the items ate marketable or not. If not marketable although there is some value , it is not a goods and excise will not apply.

Ashish

Ashish (Querist)
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13 February 2011 Its movable & marketable.

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Ashish

Ashish (Querist)
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21 March 2011 Pls reply
Hi,

We have imported the Excisable material in Corrugated box(Packing chagres in corrugated box is not sepretly shown in Invoice). After import the corrugated box become useless so we are selling as a scrap. Please clarify that the sell of Corrugated box as a scrap is excisable or not and also mentioned if excisable than at what rate (4% or CVD rate).

Thanks in Advance
Ashish Gupta

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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21 July 2024 If you have imported excisable material in corrugated boxes and after importation, the corrugated boxes become useless and you plan to sell them as scrap, here are the considerations:

1. **Excisability of Corrugated Boxes as Scrap:**
- Corrugated boxes themselves are not considered excisable goods under the Central Excise Act, 1944 (since replaced by GST). Therefore, the act of selling corrugated boxes as scrap generally does not attract excise duty.
- The sale of scrap material (such as corrugated boxes) is usually not subject to excise duty because the material has already been subjected to duty when it was first imported or manufactured.

2. **No Separate Excise Duty on Corrugated Boxes:**
- Corrugated boxes used for packing imported goods do not attract a separate excise duty under normal circumstances. The duty is levied on the main goods being imported, not on the packaging material.

3. **GST Implications:**
- Under the GST regime, the supply of scrap material (including corrugated boxes) may be subject to GST if the supplier is registered and the transaction qualifies as a taxable supply.
- The GST rate applicable would depend on the nature of the scrap and its classification under GST.

4. **Documentation and Compliance:**
- Ensure proper documentation of the sale of corrugated boxes as scrap, including invoices, to comply with GST requirements.
- If the corrugated boxes were imported with the main goods, ensure that the scrap sale is accounted for correctly in your GST returns.

5. **Consultation:**
- It's advisable to consult with a tax advisor or GST expert to determine the exact GST implications and ensure compliance with GST regulations.
- If there are specific circumstances or local regulations that might affect the tax treatment of scrap sales, local tax authorities or legal counsel can provide guidance.

In summary, selling corrugated boxes as scrap typically does not attract excise duty but may attract GST under the current GST regime in India. Ensure you maintain proper records and comply with GST requirements related to the sale of scrap material.