CA Amit Kumar Shrivastava (CHARTERED ACCOUNTANT) (104 Points)
10 January 2014Dear All,
A trader, who dispathes goods to the manufacturer (job worker) for repairing purpose, of the sales returned goods, which were sold earlier, is falls under the definition of manufacturing or not?
Thanks
Arun Kumar Singh
(GST Advocate)
(15220 Points)
Replied 10 January 2014
Repair does not amounts to manufacture.
karan jit singh
(Consultant)
(1299 Points)
Replied 17 January 2014
| Originally posted by : CA Amit Kumar Shrivastava | ||
 |
Dear All, A trader, who dispathes goods to the manufacturer (job worker) for repairing purpose, of the sales returned goods, which were sold earlier, is falls under the definition of manufacturing or not? Thanks |
 |
The process of just repairing is not called manufaturing but special provisions made for this situation under CER,2002.
Reffered from rule 16
If any manufacturing activity received its final product on which , ED was paid on its removal, then on such FP manufaturing unit are admissible to take Cenvat credit on such returned goods.
Therefore , subsequently after repair of such good the same good is liable to pay an amount equal to Cenvat Credit entitled at the time of receipt, on removal of the same goods.
Please Note: The amount should be adjusted again PLA in same day or adjust against the Cenvat Credit (Rule 3(4)(c) of CCR). This cannot allowed for payment till 5th or 6th of subsequent month.
Now, I know what comes in your mind, that why there is need to book Cenvat Credit when the same I adjusting it on removal of such good . This provisions is to be applied because accordingly you have to make entries in Accounts as well as Records maintained under Cenvat rules.
Regards
Karan
karan jit singh
(Consultant)
(1299 Points)
Replied 17 January 2014
and subsequently dealer is eligible to pass this amount as per Rule 16(2).
Refer explainations of rule 16(2) of CCR,2004
CA Amit Kumar Shrivastava
(CHARTERED ACCOUNTANT)
(104 Points)
Replied 18 January 2014
Thanks, but Your reply is in relating to the concern, which is involved in manufacturing activity and Rule 16 is also applicable for a manufacturer. But in my case, trader sends sales returned FP for repairing, which is not registered under CBEC. Trader role is to purchase the goods and sale the same as it is without labeling/ relabeling or making any changes in such product.
karan jit singh
(Consultant)
(1299 Points)
Replied 18 January 2014
| Originally posted by : CA Amit Kumar Shrivastava | ||
|
Thanks, but Your reply is in relating to the concern, which is involved in manufacturing activity and Rule 16 is also applicable for a manufacturer. But in my case, trader sends sales returned FP for repairing, which is not registered under CBEC. Trader role is to purchase the goods and sale the same as it is without labeling/ relabeling or making any changes in such product. | |
Yes CA Amit Kumar , I focused on manufacture, as Dealer is nothing have to pay a single penny to CG.
The only thing he will going to do that he will pass the amount levied under section 16(2) by the manufacturer when the same goods is again cleared after getting repaired.
Regards
Karan
karan jit singh
(Consultant)
(1299 Points)
Replied 18 January 2014
If the dealer is not registered under Excise ,then dealer is nothing have to treat ED anywhere.
CAclubindia
