A unit is engaged in manufacture of wires. Before removal the wires are inspected by the purchaser. Samples used for inspection (Testing) are not billed to the purchaser but retained as scrap. What procedure has to be adopted for showing the same in excise records i.e. how the quantity will be reduced in RG-1 for finished goods and increased in scrap of constituent raw material. Also guide if there will be any duty impact i.e reversal of credit, etc.
18 March 2013
Thanks for your reply. But the problem is finished goods are already entered in RG-1. Now, they have to be converted into scrap. Then how we will show it in clearance of finished goods as no invoice is being issued.
21 March 2013
AT THE FIRST, YOU HAVE TO ISSUE YOUR INVOICE FOR SAMPLING OR TESTING PURPOSE ON WHICH PAY APPROPRIAT DUTY. THEN RETURN BACK THIS ITEM IN YOUR STOCK RECORD AND ISSUE TO FLOOR. THEN RECIVE IN YOUR RG-1 IN SCRAP HEAD. THANKS. R.K. GARG. CONSULTANT, EXCISE, CUSTOMS AND SERVICE TAX
But sir does this mean that we have to pay duty twice i.e. once when we issue the material for testing (at the time of preparing the invoice) and secondly at the time of its clearance as scrap.
CAclubindia
