Raw material sale to the supplier
This query is : Resolved
Suhas Deshmukh
(Querist)
12 February 2011
Dear All
Ours is autoancilary manufacturing company used to purchase components from one supplier. Can we sale the raw material required by the supplier by purchasing it from other supplier as it cost cheaper to us? Can we gain some profit on it? What will be the Excise/Income tax implications?.
What will be the nature of transction ? Jobwork or pure Sale & Purchase
Thanks in advance
Suhas Deshmukh
Ours is autoancilary manufacturing company used to purchase components from one supplier. Can we sale the raw material required by the supplier by purchasing it from other supplier as it cost cheaper to us? Can we gain some profit on it? What will be the Excise/Income tax implications?.
What will be the nature of transction ? Jobwork or pure Sale & Purchase
Thanks in advance
Suhas Deshmukh
Madhukar N Hiregange
(Expert)
16 February 2011
If the same is an input then you could buy from x and sell it to y. The duty credit availed wouldhave ot be reversed as this is considered as an "as such" sale. This wouldbe a purchase/ sale transaction
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