Medicinal and toilet preparation excise duties act
This query is : Resolved
21 August 2012
Hi,
I'm a manufacturer under the Medicinal and Toilet Preparation Excise Duties Act.
I supply empty bottles to certain job workers for printing etc. They charge me excise duty under the central excise act, 1944.
Can I claim cenvat credit on the duty?
If not, is there any way to avoid payment of the duty?
Any arrangement by which I will not be charged the central excise duty?
Kindly note that the job worker cannot avail SSI exemption because his end product bears my trade name.
I'm a manufacturer under the Medicinal and Toilet Preparation Excise Duties Act.
I supply empty bottles to certain job workers for printing etc. They charge me excise duty under the central excise act, 1944.
Can I claim cenvat credit on the duty?
If not, is there any way to avoid payment of the duty?
Any arrangement by which I will not be charged the central excise duty?
Kindly note that the job worker cannot avail SSI exemption because his end product bears my trade name.
21 August 2012
mere printing is not an exisable job, there must be some other reason, or may be you are under branding of some taxable brand.
send the goods under challan of 214/86 or 57(F)4, both are available at excise stationary shops. on these challans he will not charge excise.
214/86 represents goods sent by manufacturer without cenvat, while 57(f)4 represent with cenvat.
send the goods under challan of 214/86 or 57(F)4, both are available at excise stationary shops. on these challans he will not charge excise.
214/86 represents goods sent by manufacturer without cenvat, while 57(f)4 represent with cenvat.
21 August 2012
Hi,
u/s 2(f) of CE, printing on glass bottles is manufacture (I have checked CETA for this)
under 214/86, I am ultimately liable to pay excise on the goods. secondly, I doubt if we will be eligible for it, because My final product is not dutiable under Central Excise.
I wont be able to use rule 4(5)(a) either, because I am not a manufacturer for the purpose of Cenvat Rules 2004.
With these things in mind, kindly offer your suggestions.
Thanks
u/s 2(f) of CE, printing on glass bottles is manufacture (I have checked CETA for this)
under 214/86, I am ultimately liable to pay excise on the goods. secondly, I doubt if we will be eligible for it, because My final product is not dutiable under Central Excise.
I wont be able to use rule 4(5)(a) either, because I am not a manufacturer for the purpose of Cenvat Rules 2004.
With these things in mind, kindly offer your suggestions.
Thanks
22 August 2012
Hello..!! Can anybody help?
29 August 2012
Dear chinmay,
you can take the cenvat credit on the basis of jobworker invoice if they will charge excise duty.
you can take the cenvat credit on the basis of jobworker invoice if they will charge excise duty.
29 August 2012
Hello, as per rule 3 of Cenvat Rules, in order to avail CENVAT, i must first be a manufacturer or producer of excisable goods.
Rule 2(t) of CENVAT asks us to refer to the central excise act for these terms viz "manufacturer" and "excisable goods".
Clearly, I am not a manufacturer of excisable goods, bacause my products contain alcohol (which is why they are under MTPExAct in the first place).
So I feel such a manufacturer wont be able to claim CENVAT.
Pls offer any suggestions/comments. Have I made any fundamental error in the above? Experts kindly guide.
Thanks
Rule 2(t) of CENVAT asks us to refer to the central excise act for these terms viz "manufacturer" and "excisable goods".
Clearly, I am not a manufacturer of excisable goods, bacause my products contain alcohol (which is why they are under MTPExAct in the first place).
So I feel such a manufacturer wont be able to claim CENVAT.
Pls offer any suggestions/comments. Have I made any fundamental error in the above? Experts kindly guide.
Thanks
03 August 2024
Under the Central Excise regime, including the provisions of the Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (MTP Act), understanding the eligibility for CENVAT credit and handling duties can be complex. Let's address your concerns and explore the relevant rules and options available:
### 1. **CENVAT Credit on Excise Duty Charged by Job Workers**
**Eligibility for CENVAT Credit:**
- **CENVAT Credit Rules:** To claim CENVAT credit, a manufacturer must be engaged in the manufacture of excisable goods or providing taxable services. Since you mention that your final products are under the MTP Act and not dutiable under the Central Excise Act, this complicates the application of CENVAT credit.
- **Rule 3 of the CENVAT Credit Rules, 2004:** States that CENVAT credit can be claimed on inputs, input services, and capital goods used in the manufacture of excisable goods or providing taxable services. However, if your products are exempt or fall outside the Central Excise purview, the credit may not be applicable.
- **Job Work and Rule 4(5)(a):** Generally, CENVAT credit can be claimed on goods sent to job workers if the process undertaken is considered part of the manufacture. However, this rule might not apply directly if the final product is not dutiable or if your product is outside the Central Excise Act’s scope.
**Central Excise Duty on Job Work:**
- **Duty Liability:** If job workers charge central excise duty for printing on bottles, and you cannot claim CENVAT credit, you are essentially incurring an additional cost.
### 2. **Avoiding Central Excise Duty on Job Workers**
**Options to Avoid Payment:**
- **Verify Applicability:** Check if the job worker's activity, such as printing on empty bottles, can be classified under any exemption or specific notification. Sometimes, job workers’ duties might be covered under specific exemptions or rebates depending on the activity and end-use.
- **Not a Manufacturer:** If you are not a manufacturer under the Central Excise Act and your product is covered under the MTP Act, the treatment of duties and credits might differ. Ensure to review any exemptions or specific provisions related to your product under the MTP Act.
- **Job Work Arrangements:** Since the job worker cannot avail SSI exemption due to the trade name, you may need to negotiate directly with the job worker regarding the handling of excise duties. One approach might be to include such costs in your agreement or try to find a job worker who can offer a different arrangement.
### 3. **Potential Solutions**
- **Review Applicable Notifications:** Look for notifications under the Central Excise Act or MTP Act that might provide relief or exemptions. There could be provisions that apply to the type of service or activity being performed by the job worker.
- **Consult with Tax Experts:** Given the complexity and specific nature of your case, consulting with a tax advisor or legal expert specializing in Central Excise and CENVAT matters is crucial. They can provide detailed advice based on current regulations and your particular circumstances.
### Summary
- **CENVAT Credit:** If your final product is under the MTP Act and not dutiable under the Central Excise Act, claiming CENVAT credit on duties charged by job workers may not be straightforward or applicable.
- **Central Excise Duty:** Duty charged by the job worker could be an additional cost if you cannot claim CENVAT credit. Explore exemptions or specific provisions that may apply.
- **Consultation:** Due to the complex nature of the issue, consulting with a tax expert or legal advisor is highly recommended for tailored advice and solutions.
Understanding the interplay between different tax regulations and exemptions is essential to managing your tax liabilities effectively.
### 1. **CENVAT Credit on Excise Duty Charged by Job Workers**
**Eligibility for CENVAT Credit:**
- **CENVAT Credit Rules:** To claim CENVAT credit, a manufacturer must be engaged in the manufacture of excisable goods or providing taxable services. Since you mention that your final products are under the MTP Act and not dutiable under the Central Excise Act, this complicates the application of CENVAT credit.
- **Rule 3 of the CENVAT Credit Rules, 2004:** States that CENVAT credit can be claimed on inputs, input services, and capital goods used in the manufacture of excisable goods or providing taxable services. However, if your products are exempt or fall outside the Central Excise purview, the credit may not be applicable.
- **Job Work and Rule 4(5)(a):** Generally, CENVAT credit can be claimed on goods sent to job workers if the process undertaken is considered part of the manufacture. However, this rule might not apply directly if the final product is not dutiable or if your product is outside the Central Excise Act’s scope.
**Central Excise Duty on Job Work:**
- **Duty Liability:** If job workers charge central excise duty for printing on bottles, and you cannot claim CENVAT credit, you are essentially incurring an additional cost.
### 2. **Avoiding Central Excise Duty on Job Workers**
**Options to Avoid Payment:**
- **Verify Applicability:** Check if the job worker's activity, such as printing on empty bottles, can be classified under any exemption or specific notification. Sometimes, job workers’ duties might be covered under specific exemptions or rebates depending on the activity and end-use.
- **Not a Manufacturer:** If you are not a manufacturer under the Central Excise Act and your product is covered under the MTP Act, the treatment of duties and credits might differ. Ensure to review any exemptions or specific provisions related to your product under the MTP Act.
- **Job Work Arrangements:** Since the job worker cannot avail SSI exemption due to the trade name, you may need to negotiate directly with the job worker regarding the handling of excise duties. One approach might be to include such costs in your agreement or try to find a job worker who can offer a different arrangement.
### 3. **Potential Solutions**
- **Review Applicable Notifications:** Look for notifications under the Central Excise Act or MTP Act that might provide relief or exemptions. There could be provisions that apply to the type of service or activity being performed by the job worker.
- **Consult with Tax Experts:** Given the complexity and specific nature of your case, consulting with a tax advisor or legal expert specializing in Central Excise and CENVAT matters is crucial. They can provide detailed advice based on current regulations and your particular circumstances.
### Summary
- **CENVAT Credit:** If your final product is under the MTP Act and not dutiable under the Central Excise Act, claiming CENVAT credit on duties charged by job workers may not be straightforward or applicable.
- **Central Excise Duty:** Duty charged by the job worker could be an additional cost if you cannot claim CENVAT credit. Explore exemptions or specific provisions that may apply.
- **Consultation:** Due to the complex nature of the issue, consulting with a tax expert or legal advisor is highly recommended for tailored advice and solutions.
Understanding the interplay between different tax regulations and exemptions is essential to managing your tax liabilities effectively.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- REGARDING GST ON COMMERICIAL PROPERTY
- Is this income indian or foreign income?
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- ITC temporary reversal and reclaim
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- GST on export of services and Input Credit
- TDS U/S. 194NF
- Applicable TDS rate for sale of property in Nov 2024
- RCM INVOICING FROM NOV-2024
- IGST Credit-Show cause notice issued-confusion
- Issue of gst e invoice
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- Regarding einvoice taken on nil rated sales
- Strategical investment in Public listed company
- CASE INTIMATION OF LIABILITY UNDER SECTION 73(5)(Rule 142(1A)
- Need to correct "Whether it is last installment " response in Form 26 QB
Trending Online Classes
CAclubindia
