Statutory Obligations

[Pradeep Jain]

Dear Sir,

Good morning,

Our company willing to outsource one of its operations (heat treatment) on our component within the plant. To perform this activity, Building will be provided free of cost. In addition to that some consumable, such as power, water etc., will be provided on chargeable basis. Some of consumable will be purchased by them directly from the market.

Now our query is that:-

1. What will be flow of document for movement of material before and after heat treatment ?
2. Is there is any Excise Duty and Service Tax liability on the said entity who is carrying this activity at the time of sending the goods after heat treatment; although Excise duty is payable by our company on the final product where in heat treated components to be consumed ?
3. In case of receipt of consumable directly by the said person , may mention our address for delivery of consumable for heat treatment;
4. What will be other statutory obligation; any intimation or registration to other state Govt. department?
5. With best regards
6. Pradeep Jain

AI Summary

Company Outsourcing Heat Treatment: Internal Memos for Material Flow, No Service Tax, Notify Range Officer for Compliance. A company plans to outsource heat treatment operations for its components within its premises, providing space for free and charging for utilities like power and water. Queries include the documentation flow for material movement, excise duty, service tax liabilities, and statutory obligations. The response clarifies that internal memos can manage component movement, and no service tax is needed as the principal manufacturer pays excise duty on the final product. The heat treatment is considered captive consumption, exempt from excise duty. The company should notify the Range officer to prevent any compliance issues.