EXCISE DUTY ON PATTERN COST RELEATING TO SEZ

[SANJEEV JADHAV]

Dear Sirs, Our is Foundry and we have manufactured patterns from outside on behalf of SEZ customer. We have to charge pattern cost to SEZ customer. In actual their will no pattern movement and only cost of patterns will be charged to SEZ customer. Please inform whether we have to charge excise duty and sales tax in our invoice for patterns. Please guide in this regard.

AI Summary

Excise duty on pattern cost: where patterns are retained and not removed, no excise; VAT applicable and cost amortised.
No excise duty is payable where patterns manufactured for an SEZ customer are retained in the factory for production of parts rather than removed; the manufacturer should charge applicable VAT, state pattern retention in the invoice, claim the captive consumption exemption in the monthly return, and amortise the pattern cost over parts produced.