Tool Amortization

[tasvir sharma]

Dear All,

We are auto part manufacturer we have use the customer tool on challan and add tool amortization for excise duty in invoice.

we need the challan clear of tool within 180day? if not please let me about the notification under cover the subjected case.

Tasvir Sharma 

[Surender Gupta]

 

There is no requirement of return of jigs, fixtures, moulds and dies within 180 days by the job worker if used in manufacture of goods in accordance with rule 4(5)(b) of Cenvat Credit Rules, 2004.

[YAGAY andSUN]

Condition of returing the Jigs, Dies and Mould within 180 does not arise if these capital goods are being used by the jobworker on behalf of manufacturer for manufacturing the finished goods as per their specification.

The only condition is that the amortisation cost should be included in the assessable value of the goods to calculate the Central Excise Duty.

Further, there would be no calculation of VAT/CST on the amortised value.

AI Summary

Tool amortisation: no return requirement when job-worker uses tools; amortisation must be included in excise assessable value. When customer-owned jigs, fixtures, moulds and dies are used by a job-worker on the manufacturer's behalf in accordance with Cenvat Credit Rules, there is no mandatory return requirement; the recovered cost is treated as tool amortisation and must be included in the assessable value of the finished goods for central excise duty, with no separate VAT/CST on the amortised portion.