Arun Kumar Verma (Excise/Accounts Executive) (25 Points)
21 February 2011Hi Good Afternoon All the experts of this forum.
We are a Shoes manufacturer and we have 5 units in all over India in different State. Can we sale the goods to our Main unit against CT-1 certificate??? while we are receiving the material to manufacture the shoes from main unit as stock transfer.
Please reply in detail (if there is any rules or notification).
MATTER MOST URGENT
Regards,
Arun
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 21 February 2011
Your unit is receiving raw materials from main unit for manufacture of shoes. CT-1 procedure is related procurement for export only and hence not aplicable. I suggest that your main unit can file undertaking with AC for job work under Noti.214/86 and can send materials to units for manufacture on job work basis and return. Under this scheme the job working unit is exempted from payment of duty. Alternatively, the unit can pay excise duty which is cenvat credit for the main factory.
Arun Kumar Verma
(Excise/Accounts Executive)
(25 Points)
Replied 22 February 2011
Dear Sir,
Thanks for your suggetion but we send the finished goods to our main unit and main unit do the export.
In this condition can we sale the goods against CT-1 certificate.
waiting for your kind reply.
Regards
Arun Verma
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 22 February 2011
Even for export the job work procedure that I have desribed is possible. Alternatively CT-1 can be used for procuring goods without duty for export . But when you use CT-1, it is admitted that the duty liability arises at job work stage which is foregone because of CT-1. In such situation I wonder that only the job working unit can claim cenvat credit and not the main unit. Anyway to conclude, complete facts has to be examined.
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