Tax structure for Pre-Engineered Building

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C.A. Mahesh (Querist)
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01 August 2009 we are Pre-Engineered Building manufacturer...Can anybody help me in framing tax structure for Pre-Engineered Building ...we are both manufacturer and service provider...is there any friend working with company with same product...

P B Srivathsan

P B Srivathsan (Expert)
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04 August 2009 Can you please give more details about your product? What are the tax structures you are looking at? Are you expecting assistance with respect to both direct and indirect taxes?

C.A. Mahesh

C.A. Mahesh (Querist)
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04 November 2009 We are manufacturing Pre Engineered Buildings means steel structure, factory sheds. it is excisable product @ 8.24 %. we have statrted factory 6 months back. Rather than approaching other company for factory shed, we produced it at our own and erected at aour factory site. now my question is whether we need to raise invoice for this and pay excise duty on it.Mind well it is capital asset.

C.A. Mahesh

C.A. Mahesh (Querist)
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05 November 2009 We are manufacturing Pre Engineered Buildings means steel structure, factory sheds. it is excisable product @ 8.24 %. we have statrted factory 6 months back. Rather than approaching other company for factory shed, we produced it at our own and erected at aour factory site. now my question is whether we need to raise invoice for this and pay excise duty on it.Mind well it is capital asset

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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26 July 2025 Got it — you’re a manufacturer of Pre-Engineered Buildings (PEBs), including steel structures and factory sheds, which are excisable at 8.24%. You’ve produced and erected the shed at your own factory site instead of outsourcing it. Your main question is:

**Do you need to raise an invoice and pay excise duty on this construction, even though it’s a capital asset for your own use?**

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### Here’s the general tax treatment and considerations:

1. **Excise Duty on Own Use Capital Goods**
When you manufacture goods for your own use (like a factory shed or capital asset), excise duty is typically applicable on the value of goods manufactured, even if not sold to a third party. This is because the transaction is treated as "deemed manufacture" for self-consumption.

2. **Raising Invoice**
You *should* raise an invoice for the transfer of goods from your manufacturing unit to your factory site. This invoice is for your own accounting and compliance to establish the transaction value for excise duty.

3. **Valuation**
The excise duty is payable on the transaction value of the capital asset. You need to determine the correct value (cost of manufacturing or market value).

4. **Capital Goods vs Finished Goods**
Even though it’s a capital asset, it is considered a finished product in excise terms once manufactured. Excise duty applies unless specifically exempted.

5. **Accounting and Compliance**

* Maintain records of production and consumption for capital assets.
* Pay excise duty as per applicable rates.
* File excise returns accordingly.

6. **Service Tax Aspect**
Since you are also a service provider (erecting the building), verify if any portion of your activity (erection or installation) attracts service tax separately under works contract service or construction service.

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### What should you do?

* **Yes, raise an invoice** for the PEB supplied to your own factory site.
* **Calculate and pay excise duty** on this transaction value at 8.24%.
* **Maintain proper records** to justify valuation in case of audit.
* **Consult with a tax professional** or excise consultant for detailed valuation methods and exemptions (if any).

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