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what is captive consumption

mitesh (Accounts Manager) (40 Points)

15 January 2010

What is captive consumption ?

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10 Replies

MOHIT MAHAJAN (LCS, ACA) (2050 Points)
Replied 15 January 2010

If goods are not sold but consumed within the factory then its known as captive consumption.

Vivek (Finally passed CA Final...!!!!!) (1097 Points)
Replied 15 January 2010

Yes... Mohit is right..

Ekta (Practicing CS) (423 Points)
Replied 15 January 2010

Yah right, In addition/ edition - If finished goods are not sold but consumed in factory only as a raw material for another/ subsequent proceedings for making another finished goods, it is called captive consumption.

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 17 January 2010

Excise is applicable on removal and captive consumption is said tobe removal. Normally where the final product is an excisable goods liable to duty the intermediate product does not require to suffer the duty u/n 67/95. However where the final product is exempt then the intermeidate product would be liable for duty. Example engine used for manufacture of tractors for agricultural use is liable to suffer duty when used for manufacture of tracrtors for AG use.

CA.Amit Mehta (Professional) (254 Points)
Replied 22 January 2010

e.g. one factory manufacturing car but this factory used tyres from its another unit than in this case it is to be said that tyres are captively consumed.

Avinash Shukla (Functional) (21 Points)
Replied 16 March 2015

Dear Sir

I have an issue regarding Captive Consumption, Is it possible that a product which was sold in my factory as a finish good but that product using as a raw material in other finish goods for my same factory so what can I do?