Tool shifting and excise procedure

[Rashmi Keskar]

Hello All,

I am having qurey regarding Tool shifting procedure..

If  A supplier has developed Tool and using that tool for part production and we have paid the Tool price to the supplier , now  A supplier closed buisness and we need to shift this Tool for further production to Supplier B then how excise duty will be handled in this case..

1.  Supplier A submitted Tooling invoice with excise duty and we paid full to A and shifted tool to supplier B

2. IS B supplier eligible to charge amortisation for excise duty calculation while producing part from Tool which we shifted to him from Supplier A

Waiting for your valuable reply.

 

Thanks & Regards,

RSK

AI Summary

Guidelines for Transferring Tools Between Suppliers: Challan Requirement and CENVAT Credit Considerations A participant in a discussion forum inquired about the procedure for shifting a tool from Supplier A, who closed their business, to Supplier B for further production, specifically regarding the handling of excise duty. The response clarified that a challan must be prepared to indicate the tool's transfer, and Supplier B should include the tool's amortization cost in the assessable value for Central Excise Duty. In a scenario where Supplier A invoices Supplier B directly, it was noted that issuing a challan is still necessary, and CENVAT credit can be availed based on the tool's usage, not ownership.