What is Captive Consumption and how to record the captive consumption. Please explain with an example.
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Captive consumption
Replies (8)
when a goods produced by a manufacturer is used by the same manufacturer in the factory for manufcture of another final product , than the inital product so consumed will be consider as captive consumption.
when whole of the so product is captively consumed than assessable value shall be 110% of cost of production as per rule 5
when a ssi unit avials exememption upto 1.5 cr during a financial year , when it crosess 1.5 , is it possible for them to take input lying in raw material stock and finished goods at the time of crossing 1.5?....and when they want to avail exemption for the next year, is they required to pay the amount equal to the input lying in closing raw material stock and finished goods stock??
The turnover for Rs.1.5 Cr is based on your sales invoices only. It means u need to take Assessable value for this purpose. Duty is required to be paid only after Rs.1.5 Cr turnover. If turnover in the current financial year is not crossed of Rs.4.00 Cr. you are eligible to continue SSI scheme in the subsequent year.
Sir if the same unit does not uses ot for production or manufacture of another product then will it be considered as captive consumption
Captive consumption means the product should be used in the same unit for further manufacture. It is called intermediate product, which can be sold or used for further manufacture. So if the product is used within the same unit for final product, then captive consumption facility can be utilized by taking exemption under notification 67/95.
Regards,
JMS
That means if no production lor manufacture is made of a article then the transaction value needs to be considered. .samart
h
If the intermediate goods is for captive consumption purpose, the you need to take value plus ten percent of value. If the same goods are intended for sale to outside, transaction value to be considered for duty determining. Remember that if the final goods are exempted, captive consumption facility is not available.
Regards,
JMS
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