bought out items

This query is : Resolved

kamal sood (Querist)
Follow

26 July 2010 pls tell me what should be the treatment of bought out items under central excise items if the items which one assesse is producing as finished product are purchased from outside and are cleared without any value addition and process.

pls note that the bought out item is the finished product that one is manufacturing and is cleared without any process and value addition i.e. it is a trading activity.

pls reply at the earliest as it is urgent.

srinath

srinath (Expert)
Follow

26 July 2010 the cost of bought out items should be excluded from the assessable value if it is valued as per section 4...

however uf they are essential parts of the goods and enrich its value it would be included

kamal sood

kamal sood (Querist)
Follow

26 July 2010 sir product is under MRP rulings. i m giving u example for understanding:

suppose if a manuf is manfing pistons as finished product and also start buying pistons from outside and clear as such. whether is it allowed. whether these pistons to be shown in RG1 which i think should not be. whether trading license to be taken.

pls guide, what are the formalities to complete or what should be done.

Upgrade to CAclubindia Pro. Subscribe Now!

srinath

srinath (Expert)
Follow

26 July 2010 ya wen u clear as such den no need to bring into excise records... and so no excise duty is payable