Excisable material

[Former Member]

dear all,

How to identify whether a material is excisable or not?

the scenario is

My client is purchasing a material from a vendor with excise duty. When the same material is sold to a customer, we should receive the excise duty from the customer . Here there is no problem.

The 2nd scenario is

My client is purchasing a material from a vendor without excise duty. The same material is sold to a customer with excise duty by mistake.

Because of this the customer is getting affected. this is mainly due to non knowing that the material is excised.

So can anyone say how to identify that a material is excised?

Please suggest.

[Lakshmipathi]

Dear anandarajan

As Prashant rightly pointed out, for any items that are going out of a manufacturing plant, you are liable to pay excise duty be it, duty is involved or not when it is coming into factory.

Having said that, your client is suppose to raise an excise invoice for the said item and claim duty from their customer. Incidentally, I would also like to inform you that from a manufacturing plant, you should not procure a component and sell it as it is as per Central Excise Rules. So in order to differentiate this, what I normally do is that I create a routing to the purchasing component, say packing and give some suffix to the same material code and invoice the material code with is having suffix value to satisfy Excise rules.

thanks

G. Lakshmipathi

[Former Member]

As per excise rules, every material which is manufactured in the plant attracts Excise Duty.

All these excisable falls under specific chapter Id and are marked as excisable with indicator 1 under excise indicator for plant and material in J1ID.

Cheers

Prashant