Trading Purchase of Idetical Goods for Trading Sale

[RAM SHARMA]

Dear Experts,We are manufacturer and registered in central excise. Can we purchase Identical goods as a trading purchase for trading sale. Please advice.Thanks

[YAGAY andSUN]

Dear Ram,

Earlier there was a requirement to get permission from the Jurisdictional Commissioner/Asstt. Commissioner/Addl. Commissioner or from Deputy Commissioner of the Central Excise for procurement of identical goods for trading purpose.  But there is no need for the same.  You would have to do following activities,namely:-

1. You would have to get the Trading Registration Certificate from Central Excise Department.
2. Separate maintenance of books of accounts.
3. Remarking of area intending for trading activities.
4. Maintenance of Statutory Records as prescribed under CEA and Rules made thereunder.

Regards

Team YAGAY & SUN

(Management & Indirect Tax Consultants)

[Madhukar N Hiregange]

Normally trading permission is not provided for the same premises. Physical separation could be insisted on especially when credit is being passed on.

At the time of audit there maybe more srcutiny.

AI Summary

Purchase of identical goods for trading sale requires trading registration, separate records, and possible physical separation. Purchase of identical manufactured goods for trading sale by an excise-registered manufacturer requires obtaining a Trading Registration Certificate, maintaining separate books of accounts, remarking or designating the trading area, and keeping the statutory records prescribed under the Central Excise Act and rules. Physical separation of manufacturing and trading operations may be required, especially when input tax credit is passed on, and the arrangement is likely to face heightened scrutiny at audit.