INTER UNIT TRANSFER SHOWS IN ER-1 RETURN

[venkat eswaran]

Dear Experts,

We have 2 manufacturing units in Tamil Nadu. in different area.  There are transfer of matls semi-finished, finished and RM in between units. from unit-2 all finished goods coming to unit-1 only. There is no direct despatch to customer place from unit-2. all the goods are coming to unit-1 only with payment of duty.

In this case how i can show in ER-1 return. Whether col.3 Details of manufacture, clearance and duty payable to be shown in ER1. or all the removal of goods to be shown in under inter unit transfer of goods directely in col. no.5 ?

If we remove Raw matls as such from one unit to other unit Whether we have to show this transaction under credit utilized in inputs removed as such in Col.5. OR we have to show in Credit utilized in Inter unit transfers?

Kindly give your views 

Thanks in advance

Venkat

[Rajagopalan Ranganathan]

Sir.

      Column 4 & 5 of E.R. 1 refers to inter unit transfer made under Rule 12 BB which is applicable to assessee who opted for Large Tax payer Unit (LTU for short).  For others all duty paid clearances should be shown in Col, 3 (5) of E.R. 1 return.  Please refer to Rule 12 BB to understand the implication of the same.

[YAGAY andSUN]

We are in agreement with the reply submitted by Mr.Rajagopalan Ranganathan.

AI Summary

Inter unit transfer reporting: duty paid clearances belong in ER 1 column three unless transfers fall under Rule 12BB reporting. Inter unit movements of materials and goods must be shown in ER 1 as duty paid clearances in column 3 unless the transfers are made under Rule 12BB applicable to LTU, in which case columns 4 and 5 for inter unit transfers are to be used; raw material removals should be reported according to that same distinction for credit utilisation.