Import of Machinery

[Pradeep Kaushik]

Respected All,

 

We are Excisable goods manufecturer.

We are making import of Machinery from South Korea. All the Documentation will be in our Company's name and all tax and Custome duty liabilities are also will be paid by our company, i.e. this machinery will be our Company's asset.

But the machinery will be installed on our Supplier's Premises instead of our Company's Premises. The supplier  will do some job work for us and this machine is required for that process.

Is there any tax and legal compliances, we have to fulfill in this regards.

Please Advice

Pradeep Kaushik

[YAGAY andSUN]

You would have to intimate the Central Excise Department in this regard.  Movement of Machinery will be on Challan and Such challan will be exchanged within every 180 days.  Machine's amortisation cost will be included in the assessable value of the goods which are intented for manufactured with the help of this machine.  CST/VAT will be not applicable on amortization cost.

[Pradeep Kaushik]

Pradeep Ji,

Thanks a lot for your valuable reply.

Please provide the rule/ circular/notification in this regards.

Best Regards.

Pradeep kaushik

[YAGAY andSUN]

In central excise, if the buyer has supplied tooling, machinery, jigs, dies etc. then, it's cost has to be amortised and included in assessable value.  In Moriroku UT India v. State of UP (2008 (3) TMI 513 - SUPREME COURT OF INDIA)= (2008) 224 ELT 365 = 15 VST 559 (SC), it has been held that there is no similar provision of adding cost of additional consideration in UP Trade Tax Act and hence such cost is not  addible.

 

AI Summary

Amortisation of imported machinery must be included in assessable value, with challan movement and Central Excise notification required. Imported machinery retained as company asset but installed at a supplier's premises requires intimation to Central Excise and movement on a challan. The cost of buyer supplied machinery must be amortised and included in the assessable value of goods produced using that machinery, and CST/VAT is not applicable to that amortisation for Central Excise valuation purposes.