Sale from Jobworkers premises

[Vaidyanathan Venkat Raman]

Our company is located at Bangalore and want to send raw material to a jobworker in Mumbai. At the Jobworker's premises, finished goods shall be sold directly from the Jobworker's premises. In such a situation, the vat law of Maharashtra shall be applicable. While as per CE Act, the Excise duty shall be paid from Bangalore Excise Registration No. My query is to how invoicing shall be made so that Excise duty is paid at Bangalore on sale of finished goods from Mumbai and Maharashtra VAT is levied.

[YAGAY andSUN]

Dear Vaidyanathan,

You would have to take care of following aspects, namely:-

1. Please refer Rule 10 A (i) of the Central Excise Valuation (Determination of Price of Excisable goods) Rules, 2000 (for valuation of goods) for removal of job-worked goods from the premises of Jobworker.
2. You would have to seek registration under MVAT Act, before sending the goods for job work purpose if you want to issue a VAT invoice under MVAT Act. Please check Section 16 of the MVAT Act read with Rule 8, 8A, 9, 10, 11, 12 and Rule 13 in this regard.
3. Take care of way bill under the VAT/CST Laws, if applicable.

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

VAT on jobworker premises sales: secure MVAT registration and way bill compliance to allow excise payment at manufacturer location. When raw material is sent to a jobworker and finished goods are sold from the jobworker's premises, VAT of the State where sale occurs applies while excise duty is payable under the manufacturer's excise registration. Follow excise valuation rules for removal of job-worked goods, obtain MVAT registration before sending goods to enable issuance of VAT invoices under MVAT law, comply with MVAT invoicing provisions, and maintain proper way bill/transit documentation under VAT/CST laws.