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Trading of finished goods by manufacturer

01 November 2015

dear sir, I am a central excice manufacturer, I Recived bulk orders now, with my manufacturing capacity, I can only maufacture 10% of my order. there are several small manufacturers (they are not in central excise) are ready to manufacturer the same items. can I trade the finished goods without paying central excice ?

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3 Replies

Ruchi (CA) (1410 Points)
Replied 01 November 2015

Excise duty is to be paid only on manufactured goods and not on trading of goods. If you are not manufacturing then u dont have to pay excise duty on that portion of goods. However, if the value of manufactured goods exceeds the exemption limit then u must pay excise duty. And here also only on that portion of goods which are manufactured by u and not on those which are only traded by u.

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Barathan Kuppusamy (5 Points)
Replied 01 November 2015

Dear Mr. Ruchi, Thanks for your clear and sharp clarification.

K.S.NAVEEN KUMAR (ADVOCATE) (124 Points)
Replied 01 November 2015

In case cenvat credit is being availed by the company on common input services then the provisions of rule 6 of the Cenvat Credit Rules, 2004 needs to be complied with.