09 July 2012
dear ca's i am an accountant in excise based organisation, in that we have some scrap as O.B, In factory it will be re-utilized as raw material, then how to take it in RG 23-A PART 1 PLEASE HELP ME
01 November 2012
we are registered with Central Excise department for manufacturing activity of steel product.We have also a trading Organisation with other name by same partners. now my question is we are purchasing finished goods from manufacturing organisation for 100 + 12.36% + vat 5% and selling to customer 140 basic value + vat is excise involves in this transaction. please reply by mentioning the section/rule where it has been stated so. If no permission is required then also state the section/rule where it has been stated so and also the procedure for doing such trading activity..
28 July 2024
To handle scrap as input in RG 23-A Part I and understand the excise implications for trading activities, follow these guidelines:
### 1. **Handling Scrap in RG 23-A Part I**
#### **Understanding RG 23-A Part I:** RG 23-A Part I is a register used by manufacturers to record input receipts and credits under the Central Excise Act. It is used to record the details of inputs, including scrap, which are used in the manufacturing process.
#### **Procedure for Recording Scrap as Input:**
1. **Determine the Scrap Status:** - If scrap is to be re-utilized as raw material in your factory, it needs to be recorded appropriately in the RG 23-A Part I register.
2. **Entry in RG 23-A Part I:** - **Date of Entry:** Enter the date when the scrap is received. - **Invoice Number:** Record the invoice number or document number related to the receipt of the scrap. - **Description of Scrap:** Mention the type and quantity of the scrap. - **Value of Scrap:** Enter the value of the scrap, which should include excise duty if applicable. - **CENVAT Credit:** If the scrap is eligible for CENVAT credit, you need to record the CENVAT credit in the RG 23-A Part I register. The credit should be claimed based on the duty paid on the scrap.
4. **Relevant Rule:** - The procedure for maintaining RG 23-A Part I and taking input credit, including scrap, is outlined under **Rule 9(2)** of the Central Excise Rules, 2002.
### 2. **Excise Implications for Trading Activities**
#### **Understanding the Trading Activity:**
You mentioned purchasing finished goods from a manufacturing organization and selling them with VAT. Here are the relevant points to consider:
1. **Excise Duty on Trading:** - **Central Excise Duty** generally applies to the manufacturing of goods and not to trading. Since you are engaged in the trading of finished goods, excise duty would not apply to the trading activity itself. - **Rule 8** of the Central Excise Rules, 2002 states that excise duty is payable on goods manufactured or produced, not on the trading of goods.
2. **VAT Implications:** - VAT is applicable on the sale of goods. The VAT you charge on the sale is separate from excise duty. - Ensure you comply with VAT regulations as per the local VAT laws.
3. **Procedure for Trading:** - Maintain records of all purchases and sales. - Ensure that you comply with VAT regulations for charging and remitting VAT. - No specific permission is required under excise rules for trading activities, as excise duty applies to manufacturing, not trading.
4. **Relevant Sections/Rules:** - **Section 2(d) of the Central Excise Act, 1944** defines "goods" for excise duty purposes. - **Rule 8** of the Central Excise Rules, 2002 deals with the payment of excise duty and does not cover trading activities.
### Summary:
- **For Scrap in RG 23-A Part I:** Record the scrap as input by following the procedure and claiming CENVAT credit where applicable. - **For Trading Activities:** No excise duty applies to trading activities. VAT should be managed as per VAT regulations.
Always ensure to keep updated with any changes in regulations and consult with a tax advisor or excise consultant for compliance and specific guidance tailored to your situation.
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