Dear the one

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Ramkrishna

Accountant

325 Points Joined March 2007

sorry dear The one

As i want to know the excise treatment of captive consumptions of any final product, which is either burn as FUEl or for making another product by blending to another product of the company ( remember- captive consumption is not of intermediate product) . Should i have to do the valuation of that material in both the cases and raise a invocie /seperate invoice & reverse the duty or duty valued be paid in PLA.

plz.

Replies (3)

The One

379 Points Joined March 2007

The One Says:

First - don't apologize please we are all friends here I was just joking. Now I am not an expert in these aspects I specialize in audits.

The answer lies in Rule 8 of Valuation rules. Captive consumption means goods are not sold but consumed internally (whether intermediate or final). In case of captive consumption, valuation shall be done on basis of cost of production plus 10%. (Final goods would be intermediate for other process.)

Now, cost of production as in above is determined as per CAS4 for both I assume would be the same so same value can be used for both purposes (I assume both the fuel and the product are the same) - Invoices now that I think should be separate for the records and for your internal control purposes it would be much better.

There are specific notifications in most cases please refer those.

Hope it helps.

There is a similar situation with NTPC please refer that