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Plant to plant material transfer

PARAG (OFFICER) (24 Points)

11 June 2011

My company has built new factory unit, while in existing unit , production is going on. For trial purpose material is getting transfered from old factory to new. Material is of type packing material, raw material, Semi finished.

I am making stock transfer Invoices writting a note -against Cenvat Credit Rule 3(4), 2004 for the same.

But my problem is I can not calculate exact price of semifinished product .

Can anybody tell exact rule of CENVAT & ER

Secondly, If you have corrct format of stock transfer Invoices pls share with me

Thanks in advance

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6 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 12 June 2011

as it is trial production, send the goods under cenvat challan, for job work, coz the goods would not be ready for sale in open market and maximum output would get rejected, hence the 2nd unit would not be able to digest the cenvat credit as the norms of scrap generation will exceed and whole cenvat credit would get reversed at the time of clearance of scrap,

while sending goods for job work, the same should be returned to you back and if its martable then u can sele it by paying duty on it, or clear as scrap after paying duty.

Ajay Raghatate (Sr Executive (Excise & Accounts)) (736 Points)
Replied 14 June 2011

If you are trf your FG of SFG to other unit or sister comapny then price of that material should be more than (Cost + 10%),

for the price ascertaining you have to find out the total cost of that semifinished goods.

There is not require seprate Invoice format for stock trf, you can use you running Invoice format for stock trf purpose..

You can avail cenvat credit in 2nd unit. if dept will raised the objection. then reverse the cenvat credit for trial prod / process waste qty.

Another option is that you can book the total value (including excise & taxes) in preoperative exp and capitalize it

R P Ananthakumar (Sr. Officer - Central Excise/Cash) (514 Points)
Replied 14 June 2011

You can transfered the finished and semifinished material to your another unit, either job order challan and sales invoice.

Take an option for your convenient.

narender (ao) (23 Points)
Replied 12 December 2012

if we are transferring material to our second unit(stock transfer) then what is calculation for raw material stock transfer. please reply

Amitabha Mukherjee (Sr. Manager, GST) (253 Points)
Replied 24 December 2012

Thanks Friends,If you sale your FG or SFG to your related other unit or sister comapny then price of that material should be in this manneris ,RM cost incl. transportation+ overhead+10% profit margin that would be your assessable value then excise duty, no VAT is applicable because it is INTER UNIT TRANSFER , and at the same time you have to procure CAS-4 certificate from cost accontant. It is mandatory as it is your related factory. Merely your costing is not sufficiant.CAS-4 IS MUST

ravi (account manager) (24 Points)
Replied 25 October 2015

One Plant same Excisable Capital Goods purchaser in 2004, and those capital goods transfer in new plant on 2015, how to calculated excise duty on capital goods transfer in new premises

pl guide us