Please Wait ..

Sign-in to your account


Username:
Password:

Remember Me

Forgot your password?

Sign-up now



Join CAclubindia.com and Share your Knowledge. Registered members get a chance to interact at Forum, Ask Query, Comment etc.


Discussion > Excise >

Excise imposed on readymade garments

    Post New Topic
Pages : 1 2





Director

[ Scorecard : 33]
Posted On 01 March 2011 at 22:39 Report Abuse

Dear sir,

 

We are dealing in readymade garments and have 2 divisions:-

1) Export readymade garments

2) Sell readymade garments to different companies in India

 

In the recent budget, a 10% excise duty has been imposed on branded readymade garments. In this context, we need your opinion on the following :-

1) All the goods that we sell in domestic market are made as per orders received from our customers and are manufactured by job workers for us. We buy and give all different raw materials to them and in return they make and give us final product (duly packed as per our customer request) which is sold to our customers as it is.

2) Since till date excise was not applicable, we did not have an excise registration certificate. Since we get all our goods made from job workers, please guide if we qualify to get registration or it has to be taken by our job workers. Does the excise need to be paid at the time of taking delivery of goods from our job workers to our godown or should it be paid when we send the goods from our godown.

3) Is there is limit under which excise is not applicable

4) In case we take a registration as we are currently having orders on hand from our customer and in case in future we do not have any local sales, can we surrender our registration certificate.

5) Since we export as well, does excise have any impact on our exports. Here also, we get all our goods made with job workers. How do we move our export goods from our godown to port for export.

6) From what date this rule will come into effect

7) In case we are required to be registered with excise dept and at present we do not have registration, can we move the goods now or we have to wait till we are allotted the number

8) is there any particular / prescribed format of inoive / bill which needs to be raised on our customers

9) Will the duty have to be paid with every transaction, or it can be paid every month like service tax / Vat etc. In case it can be paid on a monthly basis, what is the due date for the same.

 

Since we are very raw and have very limited knowledge about exicse some of our questions may sound very immature. But there are a lot of queries we have at our end.

 

We shall really appreciate a feedback from your end.

 

Thanks and regards,

Prashant


Online classes for CA CS CMA



U S Sharma
glidor@gmail.com

[ Scorecard : 19381]
Posted On 01 March 2011 at 23:22

 

Circular No. 547/43/2000-CX

 

F.No. 212/17/2000-CX.6

Government of India

Ministry of Finance

Department of Revenue

Central Board of Excise & Customs

 

Dated : 1-9-2000

 

Subject : Monthly payment of Central Excise Duty by Small Scale industries - Instructions - Regarding

 

            I am directed to say that certain doubts have been raised as to mode of payment of duty by a manufacture claiming to be in the small scale sector which may be having one or more than one unit specially where he may be manufacturing branded goods for others on job work basis in one or both of the units. It is pertinent to note that where as for the rate of duty purposes, the value of clearences of one or more units is clubbed under SSi exemption scheme (like Notification no. 9/1999-Central Excise prior to 1.3.2000 and Notification no. 9/2000-Central Excise thereafter), in so far as mode of payment is concerned duty liability had to be determined and discharged for production and clearances unit-wise, as per the Central Excise Law, depending upon duty liability for clearances effected from each unit. Thus, if for goods produced in the same unit, manufacturers

availed/avail of the benefit of exemption under Notification No. 9/1999-Central Excise prior to 1.3.2000 and Notification No. 9/2000-Central Excise and also had/has to pay duty on branded goods manufactured for others at normal rates outside the SSI exemption, then he would/will be eligible to discharge duty on monthly payment basis for all the clearances effected from the same factory/unit. Rule 173GG prior to 1.4.2000 (effective from 1st June, 1999) and rule 173G(1) thereafter, is attracted in this case and there is no intention to deny the benefit of monthly payments (by 15th of the following month) to branded goods cleared from the same unit.

 

2.          It may, however, be mentioned that if in any unit, which may also be owned by small scale manufacturer, only branded goods for others are manufactured on which normal rate of duty is payable, then benefit of Rule 173GG/173G(1) cannot be claimed as for that unit the manufacturer is not availing of the exemption based upon value of clearances in a financial year. Such manufacturing units should be treated at par with "other than SSI units" and duty payment provisions applied accordingly.

 

3.          The Board desires that the Commissioners should carefully examine the provisions made in the law and ensure proper implementation. Any difficulties noticed should be intimated to the Board at the earliest.

 

4.          Receipt of this Circular may please be acknowledged.

 

5.          Trade and field formations may be suitably informed.

 

6.          Hindi version will follow.

 

P.K.Sinha

Under Secretary (CX.6)





U S Sharma
glidor@gmail.com

[ Scorecard : 19381]
Posted On 01 March 2011 at 23:30

1)is your immediate buyer is the brand owner, and he undertakes to discharges duty payment liability?

2) if your immediate buyer is not the brand owner, then whats the relation between the buyer and brand owner? and at what stage the duty liability is discharged?

3) if the buyer and brand owner both are not in connection with supply then it would be a serious prob for manufacturer to use others brand without permission.

in a nutshell the duty is to be discharged by anyone in linked chain, and hence u can take permission to run without registration even.

once you get registered with excise, your exports will be subject to procedure laid down under rule 18 or 19.

if the brand is self made and does not belong to other merchant, then its not a trade brand, and you can enjoy the situation as it is on today, only maintain caution not to mention any brand name on documents / orders.  




Prashant
Director

[ Scorecard : 33]
Posted On 02 March 2011 at 06:47

1) our buyers are brand owners. we put brand labels as suggested by them. All the goods made by us are being sold in their shops directly by them. We have raised the issue of excise duty with them and are yet to get a feedback from them. Please advise on 2 things - (a) in case they agree to dis-charge duty at their end what is the procedure to be followed by us - considering we are getting the said goods manufactured with our job workers (b) in case they do not agree what is the procedure to be followed at our end and at the job worker end

2) We understand that our immediate buyer is the brand owner

3) noted. we shall doubly check things here

Regards,

Prashant




U S Sharma
glidor@gmail.com

[ Scorecard : 19381]
Posted On 02 March 2011 at 11:01

Originally posted by : Prashant

1) our buyers are brand owners. we put brand labels as suggested by them. All the goods made by us are being sold in their shops directly by them. We have raised the issue of excise duty with them and are yet to get a feedback from them. Please advise on 2 things - (a) in case they agree to dis-charge duty at their end what is the procedure to be followed by us - considering we are getting the said goods manufactured with our job workers (b) in case they do not agree what is the procedure to be followed at our end and at the job worker end

2) We understand that our immediate buyer is the brand owner

3) noted. we shall doubly check things here

Regards,

Prashant

1st of all await the responce from your buyer, the matter is related to duty liability only. if the brand owner has exceeded 150 lacs of such turnover then these goods are now dutiable, the question is just who will take liability of excise duty.

till that time dont issue any invoice as Branded goods, but u can issue invoice by name of garment by size/ style/ quality not by brand, 

once u get registered with central excise for branded goods, all the exemptions will go zero, and job work would be subject to procedure laid down under notification 214/86.

now wait for responce from your buyer, 

 

till that time.

you can clear the goods from your factory "unbranded" and they should fix the brand of own, mere packing in branded box supplied by the client does not amounts to manufacture of branded goods, unless u mention the brand in your documents (invoice).




Arun Kumar Singh
Tax Consultant

[ Scorecard : 9849]
Posted On 02 March 2011 at 18:31

Dear Prasant,

Readymade garments “Brand owner” is responsible to pay excise duty. Job worker is exemption from readymade garments. If you are putting sticker then you are liable to pay excise duty. You should not putting sticker of brand owner.




CHAKRESH TAMRAKAR
9

[ Scorecard : 35]
Posted On 04 March 2011 at 09:52

WHAT RECORDS REQUIRED TO BE MAINTAINED AS PER NEWLY IMPOSED EXCISE DUTY BY GARMENTS MANUFACTURERS



Pankaj Arora
Accountant/Learner

[ Scorecard : 2744]
Posted On 04 March 2011 at 09:59

 

You have to maintain RG21 Part I , RG23 Part II, PLA A/c. monthly filing of ER-1 or ER-3 if you are taking SSI exemption limit.




Jeevesh
Advocate- Tax/Corporate

[ Scorecard : 731]
Posted On 06 April 2011 at 11:10

Dear Prashant,

You should consult the Excise consultant to cater your queries.

The excise duty has been levied on the manufacturers under a brand name. 10 % duty is levied on them. But in garments industry the branded garments are being manufactured by the job workers. In the current budget it has been clarified that the job worker is not liable to pay the Excise Duty. The liability to pay excise duty shall be on the person on whose behalf the goods are manufactured by job worker. For this purpose he would be required to register his private store room or warehouse under centreal excise.

regards




hardik chhadva
article

[ Scorecard : 25]
Posted On 06 April 2011 at 15:19



There are 11 Replies to this message








Related Files








Related Threads


Post your reply for Excise imposed on readymade garments



Your are not logged in . Please login to post replies

Click here to login


Not a member yet ?? Click here to signup

Message







    

  • Use thank button to convey your appreciation.
  • Maintain professionalism while posting and replying to topics.
  • Try to add value with your each post.



Forum Home | Forum Portal | Member Control Center | Who is Where | Popular Threads | Today's Topic | Recent Posts | Today's Posts | Post New Topic | Thread With Files | Top Threads This Month | Forum Stats | Unreplied Threads

back to the top