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Captive consumption

1278 views 7 replies

Hello Experts,

We are selling and consuming Intermediate goods which we are manufacturing within the same premises, there is no transfer of intermediate product to sister company or any other unit and the Final Product is excisable.

Is this scenario of captive consumption comes under excise duty chargeable/ we need to pay the duty for this consumption??

Thanks

Piyush

 

Replies (7)

Since they are marketable........i.e, they can be sold seperately.........excise duty is to be charged on them........for prescribed tariff value or in so method concerned.......

But we are not tranferring semi finished goods to other unit and both are excisable products (Semi & Finished Goods) since it a notification by excise that if both products are excisable and we are not tranferring it from one unit to other... need not to charge duty.

 

Your views?

If the final product is excisable I think the intermediate product is not excisable. Please correct me if I am wrong

If final product is excisable then no need to pay excise duties on intermediate goods though marketable or movable subject used in the same factory.

You are captively consuming the intermediate product for manufacturing of final product which is excisable.  Hence the intermediate product is exempt from duty under 67/1995 notification.  But if you sell the intermediate product outside, then it is taxable.  In your question "We are selling and consuming Intermediate goods" you told that you are selling as well as consuming.  if you consume for production of another excisable product, it is exempt under the above notification.  If you are selling, you need to pay excise duty.

You are not liable to payment of exciduty if your final product is charged duty. because very stage of process you are not need to payment of duty. Your final product is cleared from factory at that stage you are libale for excise duty.So intermideate product is exempt from payment of duty.

thanks to all of you for your reply..... got the resolution of query


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