My company manufactures auto parts, but recently scraped and sold Rotary table (made inhouse from iron sheet cuttings could be waste) to one of its creditors and that creditor uses it as its asset, whether TCS is applicable, Rotary table was never capitalized. Please give opinion with discussion.
07 September 2008
Thanx Sir, But,let me explain, the creditor does job work of machining for us and he uses it as its asset for placing machinery over it and our unit is excisable, how can we treat,we have shown it in excise records as scrap (1) if we treat it as scrapping of old asset (2) selling of new asset developed out of scrap and fresh material(3)developed for own use but considered unusable and sold, Please give opinion?
15 November 2008
TCS is applicable only on sale of manufacturing scrap. Hence first you have to ascertain whether this scrap has arisen out of manufacturing process or not.
As i understand from the abovementioned discussion, it is not a scrap arising from manufacturing process at all. Hence TCS should not be applicable.
However I suggest you to check in detail whether this scrap has arisen out of manufacturing process or not.
CAclubindia
