Can anyone help to share me for the Excise Invoice calculation format for garments company.
As per latest Budget amendments
Excise duty of 2% (without CENVAT credit) or 12.5% (with CENVAT credit) is being levied on readymade
garments and made up articles of textiles falling under Chapters 61, 62 and 63 (heading Nos. 6301 to 6308) of
the Central Excise Tariff except those falling under 6309 and 6310 of retail sale price (RSP) of Rs.1000 and
above when they bear or are sold under a brand name. Chapter 6309 and 6310 contains Rags etc.
These items can be divided into two broad categories
First, having retail sale price (RSP) of Rs.1000 and above when they bear or are sold under a brand name.
Second, other than the above that is the readymade garments and made ups which don’t fulfill the above two
conditions. On the second category i.e. where the retail sales price is less than Rs. 1000/- and the article does
not contain the brand name, the optional NIL duty facility shall continue. In this case, if the garments or articles
are of cotton only the optional levy of „Nil (without CENVAT credit) or 6% (with CENVAT credit) shall be available
and if the garment of article contains any other item other than cotton also then option for clearance at „Nil
(without CENVAT credit) or 12.5% (with CENVAT credit)‟ shall continue to be applicable
On the first category, Excise Duty has been levied with two options;
First option is to pay 12.5% excise and take CENVAT
Second option is to pay 2% excise and don’t avail CENVAT
An option has been given to the manufacturers TO PAY only 2% Excise duty on 60% being the tariff value, In this
case the manufacturer shall not be allowed the CENVAT on the raw materials.
MRP Rs. 1200
2 Less Rebate @ 40% Rs. 480
3 Value on excise duty to be paid Rs. 720
4 Amount of Excise Duty of Rs. 720 Rs. 14.40/-*
* 2 percent of the value after rebate
For textile industry, the major input is the cloth on which option of exemption of excise duty is available to the manufacturers. Cloth is generally cleared without payment of excise duty availing the option of NIL rate of duty and foregoing the CENVAT. Thus, for small manufacturers of Readymade Garments who buy cloth from the market, the option of 2% of Excise on 60% of the value shall be an easy going option in general.
Another major impact of MRP based excise shall be on the Readymade Garments which are sold on Major Discount Basis, these Readymade Garments will be attracting Excise if the MRP is Rs. 1000 or more. Normally the RSP of these articles is kept at higher side and realizable value is much lesser post impact the market driven discount rates of 50% to 60% (as we often encounter in sale or sale/big sale kind of sale strategies).
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