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Same product of inter unit company

Ram kr. (Buisness) (883 Points)

09 March 2012

Dear Expert,

If same finished product of inter unit company and i want to these finished product transfer/sale to other unit company. What will be the excise implication. Pl. explain in brief.

Thanks

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8 Replies

CA Nitin Karmalkar (Senior Associate) (70 Points)
Replied 10 March 2012

KIndly eleborate the que. What is mean by same FG inter unit

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 11 March 2012

it should be cleared on invoice for home consumption on payment of duty to its sister concern.

Ram kr. (Buisness) (883 Points)
Replied 11 March 2012

same FG product means both unit manufactured one product. if we clear these product by raise invoice then what will be the treatment of receiver company. is receiver company treat these product as a trading goods or as a input material.

CA Nitin Karmalkar (Senior Associate) (70 Points)
Replied 12 March 2012

If another unit is processing on the transferred goods then it will trated as Input. If another will not process on same goods & clear same as such then same will amount to trading.

But in both cases another unit can avail cenvat on the basis of invoice.

Ram kr. (Buisness) (883 Points)
Replied 13 March 2012

how can we treat identical goods as a trading goods. pl. explain.

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 14 March 2012

@ Ram

its not a wise thought to clear the identical goods to another factory of same assesssee, as the same would create confussion in maintaining the stock

you have to use seperate premises for storage of such goods and get dealer registration for that premises, for bringing in and clearing such goods from another factory.

if the above provisions are not maintained, then just realize the situation , that anti evasion wing enters your premises and book a case that such goods which are taken inward from other factory are product of factory of storage, and books case of evasion and fraudnent activities, then you wil have no proper safeguard.

avoiding such situation is better option.

Ram kr. (Buisness) (883 Points)
Replied 14 March 2012

we have seperate premises and seperate registration but goods are indentical. both unit are manufacturer. can we treat one unit product as a trading goods for other unit.

Amitabha Mukherjee (Sr. Manager, GST) (253 Points)
Replied 22 March 2012

dear same item if you want to sale in your 2nd unit , the only way you can do by trading i.e availing trading licence and also in other premises and by maintaining proper records. in another , it would be your problem, although you make inter transfer by debiting duty by raising invoice. CAS-4 IS REQUIRED but it is not wise to do in this way .