branch transfer

[Guest]

Kindly clarify my understanding is correct for branch transfer from manufacturing plant to trading location in another state

1. In case of manufactured parts transferred to our location in other state : Excise is to be charged and if parts are sold to customer (manufacturer) then same Cevat can be passed on to customer

2. In case of local bought out parts transferred to our location in other state: The cenvat credit taken is to be reversed. Excise is to be charged and same can be passed on to customer when sold.or cost+ 10% with excise

3. In case of imported parts transferred to our location in other state: CVD & AED credit taken is to be reversed. Excise to be charged and same can be passed on to customer when sold or cost+ 10% with excise

[Himansu Sekhar]

situation 1: In this case, you have to pay the duty at the rate per unit quantity of the similar goods sold from the branch at the same date. If many invoices are there on the same date from the branch, the rate of the highest quantity of the goods cleared in any invoice. Please refer to the valuation Rules,2000.

Situation 2 & 3: When the credit reversed , this means no credit taken. How can you transfer the credit on the trading of goods. The question is not clear.

[KASTURI SETHI]

Point-wise my views are as under:-. 1. Yes. 2. No. 3. No. You are registered as a manufacturer and not as dealer. Only registered dealer can pass on credit. Even you will have to get your registered dealer ( Importer) to pass on credit of duty paid at the time importation. I also support the views of Sh. Himanshu Sha, an expert.

[Guest]

Thanks for the clarification sir.

Branch transfer is happening from a place where we have manufacturer licence and to other state location where we are having dealer licence. I need clarification on how to bill from manufacturing plant to other plant. on point no 2 & 3. Also if we are selling the received parts to our customer who are textile mills.

[Himansu Sekhar]

Explaining the billing will not be easy to explain in this forum

[KASTURI SETHI]

Though no manufacturing activity has been carried out on the bought out inputs and imported goods, same invoice book i.e. meant for clearance of manufactured goods can be used for despatch of goods to your othe concerns. It is input removal as such. Give the reference of purchase invoices and import docs on invoices showing these are duty paid. Photo copies may also be attached.

AI Summary

Excise on branch transfers requires manufacturer to charge duty and reverse Cenvat credits when transferring bought or imported parts interstate. Branch transfers from a manufacturing unit to an affiliated trading location in another state require charging excise duty as on a manufacturer's clearance; manufactured parts' duty-incidence permits passing CENVAT credit when subsequently sold, but bought-out local parts and imported inputs require reversal of any CENVAT/CVD/AED credits on transfer. Valuation follows contemporaneous branch sales under the valuation rules, and invoices should record input removal with references to purchase or import documents showing duty paid.