SHIFTING OF RM TO NEW GODOWN

[Guest]

Dear Sirs,

We have procured raw materials (PP) and stored in the factory premises. Due to space cconstraint, we have taken a rental godown, which is approved by excise department. Now we are proposing to move some of RM to new godown, which all are availed modvat credit. Pl advice the procedure.

[Rajagopalan Ranganathan]

Sir,

When you remove the modvat availed inputs to your godown situated outside your factory premised you have to reverse the credit already taken. You can remove the inputs under your own invoice. When you bring back the inputs back to the factory you can take back the credit based on your own invoice along with the invoice issued by the manufacturer of the inputs.

[Mahir S]

Sir,

You have to properly keep account of removal of RM to godown and thereafter receipt of the same.

You have to follow all the conditions mentioned in the approval letter issued by the excise department.

[Ganeshan Kalyani]

Will the condition of 180 days will apply in this scenario.

[Rajagopalan Ranganathan]

Dear Shri. Ganesan,

The limit of 180 days for return of the inputs is applicable to inputs sent to job worker for processing. It is not applicable to inputs transferred to godown out side the factory and brought back when space is available.

[Mahir S]

Yes sir, job work condition of 180 days will not apply in this scenario, as explained above.

AI Summary

Reversal of input credit required for transfers to an approved external godown; credit reclaimable on return with invoices. Removal of raw materials with modvat credit to an approved external godown necessitates reversal of the credit on removal; inputs may be removed under the assessee's own invoice. Maintain proper accounts and comply with approval-letter conditions. On return to the factory, credit may be re-availed based on the assessee's inward invoice along with the manufacturer's invoice. The job-worker time-limit rule does not apply to transfers to an external godown.