Machinery manufactured

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2014 dear sir,

we made a machine in our factory which is not our product and we are going to sale that machine, so what is the implication of excise on saleing that machine? we didn't taken any input for that machine.
how to sale that machine and which documents we have to make?

Arun Kumar Singh

Arun Kumar Singh (Expert)
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19 February 2014 You are manufacturing the goods others brand name then SSI exemption will not be available. You need to pay excise duty from first day.

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2014 dear sir,

our unit is not SSI

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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03 August 2024 If your factory manufactures a machine that is not part of your regular product line and you intend to sell it, there are specific excise duty implications and documentation requirements you need to consider. Here's a detailed guide:

### **1. **Excise Duty Implications**

**A. **Excise Duty Applicability:**

- **Excise Duty**: Since your unit is not a Small Scale Industry (SSI) and assuming it is a manufacturer of goods, excise duty will generally be applicable on the sale of the machine. Excise duty is levied on the manufacture of goods and not on the sale of goods. However, if you have not availed any input tax credit or benefits under excise schemes, the impact of excise duty may be limited to the basic duty applicable on the sale of the machine.

- **Value of the Machine**: The excise duty will be calculated based on the sale value of the machine, and you will need to determine the rate of duty applicable. The rate of excise duty depends on the classification of the machine under the Central Excise Tariff Act.

**B. **Input Tax Credit (ITC):**

- **No Input Tax Credit**: If you have not availed any input tax credit for the inputs used in manufacturing the machine, you will not be required to reverse any credits. The excise duty will be calculated on the transaction value of the machine as per the applicable rate.

### **2. **Sale of the Machine**

**A. **Documentation Required:**

1. **Excise Invoice:**
- **Generate an Excise Invoice**: You must issue an excise invoice for the sale of the machine. The invoice should include:
- Details of the buyer and seller.
- Description of the machine.
- Quantity and value of the machine.
- Applicable excise duty rate and amount.
- Any other details as required under excise rules.

2. **Central Excise Records:**
- **Maintain Records**: Ensure that all records related to the manufacture and sale of the machine are maintained as per excise regulations. This includes production records, stock registers, and excise duty payment records.

3. **Excise Duty Payment:**
- **Payment of Excise Duty**: Pay the excise duty on the sale of the machine as per the applicable rate. The duty should be deposited in the prescribed manner, and a challan or receipt should be obtained as proof of payment.

### **3. **Procedure for Sale**

1. **Determine Classification and Duty Rate:**
- **Classify the Machine**: Determine the correct classification of the machine under the Central Excise Tariff. The classification will dictate the rate of excise duty applicable.

2. **Prepare Excise Invoice:**
- **Issue Invoice**: Prepare an excise invoice as per the requirements. Ensure that all mandatory details are included.

3. **Pay Excise Duty:**
- **Deposit Duty**: Pay the excise duty to the government treasury or through the designated payment channels. Obtain a payment receipt or challan.

4. **File Excise Returns:**
- **Excise Return Filing**: File the appropriate excise returns reflecting the manufacture and sale of the machine. Ensure that all details are accurately reported.

### **4. **Additional Considerations**

- **Consult a Tax Professional**: Given the complexities involved in excise duty compliance, it is advisable to consult with a tax professional or excise consultant to ensure all legal requirements are met and to address any specific issues related to the sale of the machine.

- **Check for Exemptions**: Verify if there are any specific exemptions or schemes under excise rules that may apply to your case, though these may be less likely if you have not used any inputs subject to excise.

### **Summary**

1. **Excise Duty**: Excise duty will apply to the sale of the machine, calculated based on the applicable tariff rate.
2. **Documentation**: Issue an excise invoice and maintain records. Pay excise duty and file the necessary returns.
3. **Procedure**: Follow the standard procedures for excise duty compliance, including invoice preparation, duty payment, and return filing.

Consulting with an excise professional will help you navigate the specifics and ensure full compliance with the Central Excise Act and related regulations.