Manufacturing unit can also do trade????

[VASUDEV KUMBHAR]

Sir/Mam,

We are an excise registered manufactuer unit preparation of Isolator and Lab furniture by using MS and SS steel coils. For manufacturing of Lab Furniture we also used Granite/Marbal, Electrical Panal etc as an input.

While manufacturing of Lab furniture we prepared the base structure in our factory but on the surface side our client required Marbal/Granite, Electrical panel and many other items which we purchase from outside as per required drawing and fix it as such and dispatch those furniture to our client. While adding the Granite or many trading material cost our cost of production for individual lab furniture is very high and on that we required to pay the excise duty.

Below are my query against which i required suggestion from you.

1. Can we trade this material and sell it to our client directly by adding profit margin?
2. If yes then any central Excise registration we required to take?
3. Which Invoice to be Prepare?
4. Any intimation required to give the C.Excise Dept.?

Regards

Vasudev Kumbhar

GMP Technical Solutions Pvt. Ltd.

Mumbai

[MUKUND THAKKAR]

Dear Vasudev,

if you are trade under different name or supply goods separately, works contract act will be applicable by way of sales tax point of view. because all other activity you will carried out at customer end what i assume.

AI Summary

Works contract classification may apply when a manufacturer supplies procured components separately, shifting tax treatment to sales tax. Whether a manufacturer that procures finished components for lab furniture may sell those components separately with a margin rather than incorporating them into the excisable product; the reply advises that where goods are supplied separately or under a different name and further activities occur at the customer site, the transaction will be characterised as a works contract for sales tax purposes, shifting the primary tax consideration to sales tax treatment rather than central excise registration for those supplied items.