Inter unit matl movement - BED pmt reg

[venkat eswaran]

Dear All,

We are 2 mfg unit, clearance is MRP based product. one is main and another is branch. All goods are sold to customer from main unit only. Goods manufactured in branch coming to the main unit as finished and semi-finished and sold to customers from main unit only.

While removing goods from branch to main unit we are paying duty on MRP rate finished goods.? Is it ok? Or we need to pay 110% cost of goods for all items? MRP based duty is only for customers?

Is there any provision without pmt duty for inter unit transactions?

Pl provide ur valuable replies

Thanks in advance

Venkat

AI Summary

Duty Calculation for Inter-Unit Transfers: MRP vs. 110% Production Cost as per Section 4A, Central Excise Act, 1944. A manufacturing company operates two units: a main unit and a branch. Products are manufactured at the branch and transferred to the main unit for sale. The query concerns whether duties should be paid on the Maximum Retail Price (MRP) or 110% of production cost for inter-unit transfers. Respondents clarified that if goods are complete and MRP is set at the branch, duty is paid on the MRP value per Section 4A of the Central Excise Act, 1944. If further processing occurs at the main unit, duty should be based on 110% of production cost. There is no duty exemption for inter-unit transfers unless goods are exempted by government notification.