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diff. between depot and warehouse

ravi. (article trainee) (424 Points)

17 December 2009

Can anyone tell me What is the difference between warehouse and depot?

With examples...

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4 Replies

HS Negi (Senior Executive- F&A) (590 Points)
Replied 19 December 2009

Dear Ravi

Suppose in a manufacturing unit there is lack of space for storing your inputs or Finished goods then in this situation a asseesee can store its inputs or finished goods outside the factory . Such type of storage is called warehose. The purpose of Warehouse is for storage only

Whereas the depo works like a delear. Suppose you manufacturing unit is situated in delhi. But there are most of demands in western U.P. In this case you can a open a depo in any place of western UP to fulfill the requirements of your customers. You have to clear the goods on payment of duty on the invoice under rule11 from your factory to your depo.

I think this will clear your doubts.

Regards

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Reetika Goel (Qualified Chartered Accountant) (565 Points)
Replied 20 December 2009

As said by Mr. Harinder Singh Negi, i agree with him to some extent but would like to throw some more light on this.

Warehouse: Warehouse can be of two types 1) registered under excise 2) Not registered under excise (May be refered as Depot)

Under Excise, if warehouse is registered under excise, then manufacturer can deposit his goods in the registered warehouse without payment of duty provided:

- Either goods are specified under Rule 20 of CER'2002

- Or, Goods are of seasonal nature & there is space shortage in factory of production.

If goods lie under second condition, goods can be shifted to registered warehouse only after obtaining permission of Central Excise Officer who can impose some conditions on such transfer.

On transfer of goods from factory to registered warehouse, the liability to pay excise duty comes on warehouse keeper.

DEPOSIT OF GOODS IN REGISTERED WAREHOUSE WITHOUT PAYMENT OF DUTY IS ALLOWED FOR THE REASON THAT DEPARTMENT HAS CONTROL OVER REGISTERED WAREHOUSE.

Second case is of unregistered warehouse: It is just like a depot where goods can be deposited only on payment of Excise Duty. Manufacturer will have to pay excise duty on removal of goods from factory, be it for sale or transfer to its own warehouse/depot.

I think, now you must have got the zist of difference between warehouse & depot.

For any further assistance you can mail me at ca.reetika_goel @ hotmail.com