Excise Duty on Tooling developed by Supplier

[Pradeep Jain]

Dear Sir,

Our supplier has developed / buy tools on our behalf for and will be captive comsumed by him for supply components to us, within number of years . Tooling amount is paid to the supplier,since the said tools are laying with the supplier and there is no phycical movement of above said Tools from supplier premises to our premises hence no excise duty is charged on the said toolings invoice.

Now instead of the amortised the cost of said tools , we want to pay whole exise duty of the tools , on the excise invoice raised by supplier at time of first supply of components.

In that case, will be able to get the CENVAT credit of the said tools which is paid through above manner?.

Is there is any other issue / implications for follow the above procedure ?

Please reply

Regards

Pradeep

AI Summary

Buyer Seeks Upfront Excise Duty Payment on Tools; Experts Insist on Amortization in Assessable Value Per Rules. A supplier developed tools for a buyer, which remain at the supplier's premises, prompting a query about excise duty implications. The buyer seeks to pay the entire excise duty upfront instead of amortizing the cost over time. Responses highlight that excise duty should be paid on the amortized cost, and physical movement of tools affects CST/VAT charges. It is clarified that even without physical transfer, the cost of tools must be included in the assessable value of the final products. The discussion also notes that paying duty on tools doesn't negate the need for cost amortization in the product value.