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Sales return in excise for manufacture


Dear Viewers,

I want to know how to handle the sales return in excise. For example I have sold 100 quanties by charging excise duty. Now the buyer returns part of the goods let us say 50 qty under rule 11 invoice.

1)  How do I account this 50 qty. Should I take it to ER1, Daily Stock register or RG23 A part I.

2) Buyer has issued me rule 11 invoice,based on that can i avail CENVAT credit and if so where should I show the credit i.e. RG23 A part II and ER1. Then what about the quantity returned. Should I show in RG23 A part I which is maintained only for Raw Material (principal Inputs) but the returned goods belong to Finished good. How do I handle?

3) When I re-sell these 50 quantity, where should I show this. If I show in daily stock register, it would amount to double the quantity because when I have manufactured the finished good, I have already accounted it.

4) While re-selling the goods, i will charge excise duty and where should I disclose this duty.

Kindly clarify the above. Thank You very much

 
Reply   
 
glidor@gmail.com


when duty paid goods returns to principal manufacturer, he has to intimate the R/O within 24 hours of such receipt and take credit in RG23A-Part 2, R/O may depute his personal to verify the facts as test.

DSA can not be entered in double, for same goods

when the goods are cleared again, it bears the original invoice reference and the input invoice reference. 

 
Reply   
 


MANAGER - COMMERCIAL


Dear Mr. Ranganathan,

According to Rule 16 of CE Rules, any goods on which duty had been paid at the time of removal are brought back to any factory for being re-made, refined, re-conditioned or for any other reason, the assessee shall state the particulars of such receipt in his records and shall be entitled to take CENVAT credit of the duty paid as if such goods are received as inputs and utilise this credit. If the process of rectification does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken and in any other case the manufacturer shall pay duty at the rate applicable on the date of removal and on the value determined at that time.

Earlier the system was to inform the details of sale return to C.E. Department, immediately on receipt, through D3. Now there is no D3 and you can record the details of receipt (Qty) in your RG 23A Part I and take the credit in RG 23A-II. For the better control of Receipt and Re-despatch you can maintain a private record such as a Sale Return Record Register with the details of receipt and re-despatch (Like in RG-1). As it will effect double production, the sale return will not be recorded in DSA (RG1). For identification you can mention “Re-Despatch Invoice” on the Bills while re-sending the same.

 
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Executive-Excise


For Sales Return, no need to intimate to Range Excise.  For goods cleared under ARE1 OR ARE3, and if the same returned back then it should be intimated to Range Office.

Records of sales ruturned goods can be maintained through seperate register (other than DSA - Daily Stock Account) which may be called Returned Goods Stock Register.

Cenvat credit can be availed after taking entry in Returned Goods Stock Register.  The clearance of returned goods after its manufactuirng or as such, can be recoreded in this register.

If returned goods clared as such, then duty is payable equal to credit taken.  If returned goods is cleared after manufactuirng / re-processing, then duey is payable at current rate of duty.

Details of returned goods receipt & re-despatched should reflect in ER-1.  Details of receipt & redespatch can be shown in seperate row in ER-1 with remarks for returned goods under rule 16.    

  


Total thanks : 1 times

 
Reply   
 
Sr. Officer - Central Excise/Cash

1. Based on that your customer invoice you can take cenvat credit.

2. You can maintain the Annexure 58, prescribed in Excise manual. (Form 5 Register). 

3. You can reverse the duty amount at the time of despatch of returned goods after rework / re-processing / re-manufacturing.    In these case you have to pay the duty, if the parts / components  are replaced while doing rework / re-processing / re-manufacturing. 

4. Details of returned goods receipt & re-despatched should reflect in ER-1.  Details of receipt & redespatch can be shown in seperate row in ER-1 with remarks for returned goods under rule 16.    

 5.  Filled the resptive coloumn in Anex-58

 
Reply   
 

Thank You very much to Sanjay,Anil,Sharma and Anantakumar. Sorry i was not in a position to access CA club in the past one month.

I will come back with some more queries with regard to the above subject.

 
Reply   
 
commercial executive


 

You can maintain the Annexure 58, prescribed in Excise manual. (Form 5 Register). 

You can reverse the duty amount at the time of despatch of returned goods after rework / re-processing / re-manufacturing.    In these case you have to pay the duty, if the parts / components  are replaced while doing rework / re-processing / re-manufacturing. 

Details of returned goods receipt & re-despatched should reflect in ER-1.  Details of receipt & redespatch can be shown in seperate row in ER-1 with remarks for returned goods under rule 16.    

Filled the resptive coloumn in Anex-58

Other wise you have to pay the same amount whitch you have to taken in as credit  

 

 
Reply   
 
commercial executive


 


Returned goods under Central Excise are to be operated under the provisions of Rule 16 of Central Excise Rules,2002. In terms of this rule, if the duty paid goods are returned to the factory for whatsoever the reason, the entry of the goods should be separately shown in the Daily Stock Account as returned goods. They should be treated as ' Inputs' for all purposes. You should avail the input credit like other inputs basing on the invoice issued by your customer or on your own invoice. If the goods which are returned are subjected to sale again without undergoing any process then you have to reverse the equivalent credit availed at the time of return. If they have been subjected to any process which amounts to manufacture, then you are at liberty to pay the duty as per the transaction value. Presently no refund mechanism is there for the returned goods. Instant credit is available in the form of inputs. In case, the goods are not accompanied by any of the documents, then only you have to rush to the superintendent of central excise under the provisions of 16(3) of Central Excise rules,2002.

 
Reply   
 
commercial executive


Originally posted by : Ch.Venkata Ramana

 


Returned goods under Central Excise are to be operated under the provisions of Rule 16 of Central Excise Rules,2002. In terms of this rule, if the duty paid goods are returned to the factory for whatsoever the reason, the entry of the goods should be separately shown in the Daily Stock Account as returned goods. They should be treated as ' Inputs' for all purposes. You should avail the input credit like other inputs basing on the invoice issued by your customer or on your own invoice. If the goods which are returned are subjected to sale again without undergoing any process then you have to reverse the equivalent credit availed at the time of return. If they have been subjected to any process which amounts to manufacture, then you are at liberty to pay the duty as per the transaction value. Presently no refund mechanism is there for the returned goods. Instant credit is available in the form of inputs. In case, the goods are not accompanied by any of the documents, then only you have to rush to the superintendent of central excise under the provisions of 16(3) of Central Excise rules,2002.

 
Reply   
 

actually Sir, I'm working in a manufacturing co.. where goods are sold & returned in continous way.

My querie is :- 

1} to, take credit of c. excise & to entered sale return in excisable unit, which document is reuired?

actually my customer doesnot give debit note to us, that's why I'm asking such question.on which basis we enterd the sale return & take credit of excise for such good which duty has been paid earlier.  please reply on email id: mailtocharanpreet.bhatia @ gmail.com

 
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