Excised input and exempted output

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Dear All,

I am in the plastic reprocessing industry, we process plastic scrap into pellets. Under the current rules, excise exemption is provided to all plastic reprocessers. Now, the issue I have pertains to an industrial scrap source which is going to charge me excise duty for its plastic scrap. Being a reprocessor, my output is exempted from excise duty. This situation presents an issue wherein I cannot avail CENVAT credit on my purchase. 

Since my clients have to pay excise on their finished goods (injection molded or woven products), I feel that if I can forward the excise credit (paid by me on my raw material) to my clients, it will be beneficial for both, me and my clients. Is there any way by which this can be achieved, without collecting excise duty on my selling price? 

Secondly, after reading a bit about this, i feel that nothing is stopping me from registering with the Excise Dept. and charging my clients excise duty on my finished products. This excise duty can be offsetted with what I've paid for my raw material and can be transferred to the client who can offset it with his produce. Is this understanding correct? And can this be done?

Please answer both questions and suggest alternate solutions for this issue if you have any. I would appreciate if people with great experience can suggest better ways of solving this issue, as currently all excise that I am paying on my raw material is an added expense that I cannot afford.

Thanks in advance,

Regards,

Karan

 

 

Replies (1)

Dear Sir

When there is no duty on your fianl product, no need to charge duty but you must pay cost with taxes to your supplier.

Regards

Kumar


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