valuation job work

[Mukund Thakkar]

sir,

My client is putting order to me on following manner.he is not registered manufacturer but procure the raw material and forwarding to me,

on the based of his design and drawing final product comes in existence, he will paying us labour charges (sub contracting charges), please suggest me valuation in this regards.

example;-

1) raw material Rs 1000/-

2) transportation is arranging by customer. ₹ 100/-

3) Insurance in scope of job worker. ₹ 50/-

4) sub contracting charges ₹ 10 (labour charges)

5) excise 12.36% and applicable VAT.

6) After existence of final product, we will have to dispatches as per place suggested by customer, please not in depot, but same will be used for own.

In such situation please guide me which value is applicable for billing during the time of clearance.

AI Summary

Job-work valuation: transaction value rules require inclusion of raw materials, insurance, job charges and principal's profit.
Where the principal manufacturer sells the job-worked goods at removal to an unrelated buyer, the transaction value governs excise valuation and must include raw material cost, insurance, subcontracting charges and the principal manufacturer's profit; if no such sale at removal occurs, the normal transaction value from the place of sale or other applicable valuation rules apply, and transport to delivery is excluded from value.