excise on garments for branded goods

[Satbir singh wahi]

Sir

The Garment unit has domestic sale 85 lacs and export sale 15 crores. Now it wants to take order of 15 lacs for supply of garments to domestic buyer under brand name of buyer . Whether Excise registration is required.

[Rajagopalan Ranganathan]

Since your domestic clearance value is not exceeding ₹ 1,35.00,000/- ( 90% of 1,50,00,000/-) you need not take a registration. Since the value goods cleared for export under bond/LUT without payment of duty need not be included in the value of clearance for domestic market you need not worry about clearances made for export.

[KASTURI SETHI]

Sh.Satbir Singh Wahi Ji,

Pl. also go through the reply dated 17.2.16 of Sh. Mahir S. in respect of Issue ID :109893 dated 17.2.16

AI Summary

Excise registration threshold excludes export clearances under bond or LUT, so domestic clearance below threshold avoids registration.
Whether a garment manufacturer must obtain central excise registration depends on the value of domestic clearances; exports sent under bond or under a Letter of Undertaking without payment of duty are excluded from that computation, so if domestic clearances remain below the applicable threshold registration is not required for domestic branded supplies.