I have a scenario, where my company which is a manufacturing company is purchasing raw materials from a vendor. The vendor sends the items directly to a Sub Contractor. The vendor is paid with Excise. Now, the subcontractor gets the raw materials delivered to its warehouse. He takes the cenvat credit. He will process the items and the processed item to my company. It will charge the amount for processing and my company will pay the bill amount and the net excise amount to SubContractor. I heard in case of Sub Contracting, the sub contractor gets a 180 days rebate of Cenvat. Is it true?
I want to know how Cenvat process works in Sub Contracting. If any changes are required for the process or this process is fine. If anyone can give any suggestions as to how to process this in SAP. Also, do we have to create the Sub Contractor as a separate plant?