Manufacturer Registration

[Vivek Gupta]

A new start up company wishes to undertake manufacturing activity on job work basis. Kindly clarify whether :

1. Can it be registered as a first stage dealer.

2. If it has to be registered as a manufacturer only, then is it compulsory to have a manufacturing set up i.e plant and machinery etc as it will get manufacturing done on job work basis.

[KASTURI SETHI]

Reply to query no.1 is No. You can get job work done without CE registration under notification no. 83 & 84/94 as SSI unit till your turnover reaches 1.50 store.

[Vivek Gupta]

The turnover will be more than the threshold limit of ₹ 1.50 crores.

[KASTURI SETHI]

Then registration as manufacturer with machinery is must. You may install machinery for some processes and remaining processes can be got done on job work basis. Some machinery, equipments etc. Must be installed.

[DR.MARIAPPAN GOVINDARAJAN]

I endorse the views of the experts.

[Himansu Sekhar]

Registration is required if you will pay the duty as a job worker

[KASTURI SETHI]

Dear Querist,

Here is a case law in support of my views:-

2014 (302) E.L.T. 65 (Tri. - Del.) =  2014 (2) TMI 9 - CESTAT NEW DELHI SAFEFLEX INTERNATIONAL LTD. Versus COMMR. OF CUS., C. EX. & S.T., INDORE

[KASTURI SETHI]

Also read definition of 'factory' under Section 2 (e) of the Central Excise Act, 1944

SECTION 2 DEFINITIONS

(e) “factory” means any premises, including the precincts thereof, wherein or in any part of which excisable goods other than salt are manufactured, or wherein or in any part of which any manufacturing process connected with the production of these goods is being carried on or is ordinarily carried on;

Without installation of machinery in connection with the any manufacturing process, the empty premises/building cannot be called 'factory'

Machinery is an integral part of factory. Without machinery it is called building. There are also so many other parameters/factors to be qualified to term any building a factory..

[Rajan Rajan]

Dear Sirs,

Wrongly Selected “Not Migrating to GST” at the time of filing April 2017 ER-1 return, instead of Enter your GST Username & Return Status shows Marked for Review. This may impact our GST Prov ID/ARN cancelled also Credit migration in GST regime. Please advice to rectify.

[KASTURI SETHI]

You can revise your ER -1 for April, 17 by 31.5.17. File correct revised return.

[KASTURI SETHI]

Sh.Rajan Rajan Ji,

No action can be taken by the department on this lapse as still GST Act has not come into force.

AI Summary

Manufacturer registration requirement: turnover above threshold triggers mandatory manufacturer registration and installation of machinery; job work allowed pre-threshold. Job work can be performed without Central Excise registration under small scale notifications until the unit's turnover remains below the statutory threshold; once turnover exceeds the threshold, the entity must register as a manufacturer and maintain plant and machinery. Some processes may be outsourced, but machinery and other factors are required for premises to qualify as a factory under the statutory definition. If the job worker or another person is liable to pay duty, registration obligations attach to the person responsible for duty payment.