E D

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 May 2011 ours is a manufacturing unit. we are in non excisable zone. We purchase copper rod from one supplier whose is in excisable zone. We send the purchsed rod to job worker who also is in excisable zone. The ED which we pay while purchasing copper is claimed by the job worker and the job worker pass that ED to us as discount on final product. Here the main thing is first the job worker bills on the total value i.e., cost of copper+job work cost+difference of ED(ED on final product - ED paid by us earlier). The supplier is charging higher ED as he is supplying from Union Territory. He is saying that we will get additional benefit in this as the job worker pass on the excess paid ED to us as discount.

I cannot understand in what way we are benifitted. Please clarify.

U S Sharma

U S Sharma (Expert)
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26 May 2011 in your case, the job worker is deemed manufacturer of goods after job work, so he takes cenvat credit and charge excise on finished goods.

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