captive consuption

[Former Member]

Hi

Following is the Issue of Captive Consumption,

When I will move Finish Good material from finsih Good storage Location for internal use (to diff storage location) within plant,I have to pay Exicse Duty when i will move matrail and also want to take credit against the same.

How to map above issue

Regards

Hemant

[Lakshmipathi · Accepted solution]

Dear Hemant

I dont think it is necessary to show the movement details from one storage location to another as for as Captive Consumption is concerned.

What the Excise Rule says on Captive Consumption is that

valuation shall be done on basis of cost of production plus 10% (Rule 8 of Valuation Rules). Captive consumption means goods are not sold but consumed within the factory.

Moreover, for any manufacturing plant, you have to account all incoming excisable goods and outgoing goods and in between whatever operations the manufacturer is making, it is not necessary to pay duty for those operations.

thanks

G. Lakshmipathi

[Former Member · Accepted solution]

Dear Lakshmipathi

Then how to map this scenario

suppose i ave 100 ea in BSR and i have sent to another plant which has same excise registration number

is it can be done through STO

regards

Edited by: rithvika on Feb 9, 2009 5:14 PM

[Lakshmipathi · Accepted solution]

Dear Rithvika

Sorry I am not clear with your requirement. What do you mean by BSR ??

Normally, when you transfer an excisable material from one plant to another plant, you are suppose to levy duty.

Moreover on your comments

i have sent to another plant which has same 
        excise registration number

I doubt two plants having the same excise registration number. To my knowledge, even if two plants is having manufacturing address adjacent to each other, the excise registration number would be different. May be I have to check with some Excise expert.

thanks

G. Lakshmipathi

[Former Member]

HI

I mean 2 plants in the same premises and only 1 excise registration number

1000

2000 are plants with only one excsie registration number and both are in the same premises

regards

[Former Member]

Hi Hemant

i think moving of material from one storage location to another storage location with in one plant need to debit the excise duty............if u r moving material from one plant to another plant then only you have to debit the excise duty from one and same excise duty credit can be taken at another plant.........

excise authority will keep all excise recoreds based on plant not storage location.

if u required more details kindly let us know...

Regards,

Ratish

[Former Member]

Hi,

Thanks to all of you for your conrtibution.

BSR is Finish Good Storage Location from which if will move the matrial outside you have to pay excise duty.,In My case while client is moving material out from BSR they will pay excise duty so excise payable account will get hit and they will consume that material on another storage location within same plant for other use may be for production and at this stage input excise account should get hit and they will take 50% credit in this month and remaining 50% credit will take in next month.

I have given them following solution

Move material frm st location to st location with moment type 311-MB1B

RG1 will get hit at this stage

Manual entry will pass in J1IS for payable entry

Manual excise entry will pass in J1IH for Input excise

develop Z out programm for Excise output for J1IH

Kindly advice is it valid solution

Regards

Hemant

[Lakshmipathi]

Hemant wrote

while client is moving material out from BSR they 
"will pay excise duty" so excise payable account 
will get hit and they will consume that material on 
another storage location within same plant for 
   other use may be for production

As already stated, to my knowledge, the above process itself is wrong. While moving any excisable product within a plant, you need not to show each and every movement.

What the Excise rules says is that you have to account what duty the manufacturers pay while inwarding a component and what duty you levy while sending out / selling that component. Central Excise authorities are not bothered about intervening process.

thanks

G. Lakshmipathi