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Material return to buyer

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Vijia Kumar

30 Points Posted on 09 December 2014

We are structural steel fabricators, and we got order from a multinational company for fabrication job. the company providing steel to us on free of cost basis with our consignee name. we are taking credit of the raw steel and we are billing to multinational company with excise duty, but consignee is different. Our billing rate includes raw steel cost and our fabrication charges. the multinational company executing their same job with different fabricators also. Some times they are instructing us to divert the steel to some other fabricators under as such removal invoicing.

My question is can we divert the steel under as such removal to other fabricators with consignee and buyer is multinational company. Please explain the procedure and liabilites to us.

Replies (1)

Harshal

82 Points Posted on 11 December 2014

As per CenVAT Credit Rule 5 When inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in rule 9:

So in your case, If you remove raw materialas such you have to pay amount equal to CenVAT Credit availed while purchasing/receiving those goods in factory.