A manufacturer sends Rawmaterals like Iron rods, Castings in kgs to job worker for manufacturing components. The scrap generated at job worker end is not returned to manufacturer. The manufacturer has already adjusted the value of scrap while fixing the job work charges..
Can anybody explain whether any problem would arise with respect to valuation. Kindly also let me know the responsibility of manufacturer in the above case ?
Responsibility of mfg:
as per sec 143(5) any waste and scrap generated during the job work supplied by the job worker directly from his place of business on payment of tax if such job worker is registered or
by the supplier, if job worker is not registered.
valuation on behalf of job worker:
sec 15(1) not applicable because consideration not wholly in money, so valuation should be done as per rule 27
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