Excise treatment on inter branch transaction of rm and fg

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HARMANDEEP SINGH

DIR

23 Points Posted on 20 January 2016

Excise on transfer of RM from Branch Office ( Dealer id) to manufacturing unit of same company (manufacturing Id) and reverse on FG

Actually I am manufacturing PVC Pipes in New Delhi and selling my goods to a dealers in Uttar Pradesh on via retail invoice after leving Cenvat on Cform basis

To avoid paying 2% cst which is cost of my dealer and to avoid claiming refund from Delhi VAT departmant ( as all our purchase is Local) We are planning to open a branch office in UP.

I want to make purchase in UP and transfer the RM to delhi office (factory) and then after producing the goods we want want to transfer the FG to UP office to be sold as local sale

For Vat purpose we propose to send goods on Form F and for cenvat purpose we would like to pay the excise at Delhi production facility

Is it a viable proposition......need an informed suggestion asap

thanks

Replies (2)

Madhukar N Hiregange

Chartered Accountant

33545 Points Posted on 20 January 2016

If there is a pre existing order in UP then CST payable even if transferred on stock transfer basis. If goods transferred in bulk and not against order in hand then ST possible.

UP needs ot be registered under CE and can pass on the duty paid as per Rule 7 of the CEVR. ( price at UP at timeof removal from Delhi) or provisional assessment if prices optin not chosen.

HARMANDEEP SINGH

DIR

23 Points Posted on 21 January 2016

Thanks for you reply, Please note

1. I am manufacturing under licence and brand of buyer hence it is predetermined (is CST must in this case)

2. In case of billing the assessable value for CENVAT purose the at the time of billing from delhi would be delhi price or UP FG sale price ( as transport and handelling would be added on to delhi price )