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can we send packing material as FOC without excise

Amit Prakash Singh (Accountant) (295 Points)

11 February 2011

we purchasing packing material from packing vendor with excise ,but we not taking credit of that can we send this packing material for job work for our finish product to another vendor( who make our finish product on our behalf).he will pay duty when he send finish product to us .after that we sell this finish product as duty paid material. my query is that can we send packing material as FOC without excise ( not taking cenvet credit of that material ).

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13 Replies

Sandeep Ramankutty (Auditor) (163 Points)
Replied 11 February 2011

sir in this case i think the job worker is paying the excise duty on manufacture. the name of the party on the invoice can say who is entitled to cenvat credit. the packing material is an input and if you are claiming cenvat credit for your other clearances, the cenvat credit will be accounted for you. i cannot understand why are you not interested in claiming cenvat. if you can give the detailed info about invoicing, maybe i can help u

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 February 2011

following details required before the proper reply

1) you are registered with excise? if yes, availing cenvat credit or availing exemption of 1.5CR?

2) is job worker registered with excise? if yes then have to sent the materials under job work challan?

please reply to get a clear view of your query.

Amit Prakash Singh (Accountant) (295 Points)
Replied 11 February 2011

Dear Sir,

We are excise registered manufacturing company ,We purchasing packing material form Ujjain who is also registered in excise .After that we want to sent this packing material to our another vendor who give us our finish product after packing.

In this case our finish product vendor (registered in excise )sell to us after payment of excise ( on behalf of us ) .We sell this as "Duty paid Material "(mention on bill ).

Now first situation for me how to send Packing material to Vendor(finish product vendor).if we send this material through job work challn wat the procedure of it. am confusin between Job Work Challan and job work invoice.

Pls help

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 February 2011

follow the link , everything there regarding your query

/articles/job-work-under-central-excise-2116.asp

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 February 2011

Originally posted by : Amit Prakash Singh
	Dear Sir, We are excise registered manufacturing company ,We purchasing packing material form Ujjain who is also registered in excise .After that we want to sent this packing material to our another vendor who give us our finish product after packing. In this case our finish product vendor (registered in excise )sell to us after payment of excise ( on behalf of us ) .We sell this as "Duty paid Material "(mention on bill ). Now first situation for me how to send Packing material to Vendor(finish product vendor).if we send this material through job work challn wat the procedure of it. am confusin between Job Work Challan and job work invoice. Pls help

Wuth yoiur this post it appears that u r dealer who buy packing materials from 1 party and fnish goods from 2nd, and send the materials of 1 to 2 for packing of your goods with specified logo / print / etc.

in such case the vendor is not a job worker, but if u want to avail the credit of packing materials then get invoice direct in name of party 2 and they can avail cenvat credit and issue invoice to you including cost of packing after paying duty.

in practical its just waste of paper work , as the goods sold are duty paid nature, and no credit is enjoyed by you either in packing materials or in finish goods.

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Amit Prakash Singh (Accountant) (295 Points)
Replied 11 February 2011

Dear Sir,

You are write we work as dealer but my superior (strictly restricted) want packing material first reach to our address then we will give it to Party 2 .wat we will do in this case.

Pls help

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 February 2011

as these are duty paid materials , u can send on simple challans for packing of your materials in the cases / cartons provided by you.

duty credit is not possible in this case.

Amit Prakash Singh (Accountant) (295 Points)
Replied 11 February 2011

Dear sir can we send this on simple challan( as priscribed by you ) without excise and cst .

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 February 2011

CST ? is that vendor situated outside your state? then u have to suffer of CST or use form F

Amit Prakash Singh (Accountant) (295 Points)
Replied 12 February 2011

Dear sir

yes vendor situated outside our state but we want to send it as FOC in this situation can we make challn without excise or CST?

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 12 February 2011

ask the vendor, as outstation sending goods may invite waybill and other related transaction queries, if he is ready then send as "packing materials to be returned with your goods"

if u have branch in that state, then do stock transfer, against form F this will save many hassles.

Amit Prakash Singh (Accountant) (295 Points)
Replied 12 February 2011

Dear Sir

I come to know that Material below than Rs 25000 thousand (in Haryana) not required Way Bill .We want to send packing material as FOC(free of cost ) may in that situation way bill is not required.Can we send packing as Foc challan withiout excise and wat the paymnet procedure( paymnet to party 2 ) after reciving Finish product (packed) from vendor.and about cenvat credit

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 12 February 2011

1) in your accounts the expenses would go to "packing charges" , no cenvat credit available in this case, as the goods are not manufactured by you.

As you are not direct manufacturer nor the duty is paid by you on finish goods so the input credit is not available to you,

2) you can send the goods to next supplier on plain challan, make 4 copies of it, in follwing manner, mentioning specifically " goods not for sale - to be used packing of goods against our order no ............................. and returned to us" without charging any excise or vat/cst.

copy 1) to be retained by the receiver

copy 2) signed and delivered after receipt of goods at their end

copy 3) singed and returned alongwith the materials, with a note that goods are used in packing of goods and returned to you.

copy 4) extra copy, may be used to produce with their invoice.

specifically you have to take records that the packing goods are bought by yourself, sent to next party , returned back with goods and cleared with principal goods, otherwise u will face trouble in vat assessment as the goods would remain in your custody(stock) and vat department may consider it as undisclosed sales, so consumption of these packing gods in the goods.

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