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Former Member

sale of imported scrap


The scrap is either imported or purchased through high sea purchase and if the material is found inferior quality the same will be returned to the party or on the supplieru2019s advice the material will be sold to another customer.

The AED paid on the imported material or the material purchased through high seas purchase will be transferred to the supplier or the new customer. The required tax Procedure will as follows:

Assesable Value 100.00 622,768.57

CVD 14% 14.00 14% on assesable value 14% 87,187.60

Cess on CVD 2% 0.28 2% on CVD 2% 1,743.75

HSCess on CVD 1% 0.14 1% on CVD 1% 871.88

Customs Cess 2% 0.29 2% on CVD, Cess and HSc on CVD 2% 1,796.06

Customs Hscess 1% 0.14 1% on CVD, Cess and HSc on CVD 1% 898.03

AED 4% 4.59 4% on the above total 4% 28,610.64

119.45 743,876.53

TN Vat 4% 4.78 4% on the above total 4% 29,755.06

Gross Value 124.22 773,631.59

The above calculation is followed on payment of import duty. Out of the duties mentioned above, except cess on customs and HSCess on customs, other duties are eligible for input credit. Hence on sale we will have to reverse the input credit taken.

At present, we are selling the scrap which is arising out of our manufacturing activity. The provision of TCS is applicable on sale of these scraps. In the earlier one it is only trade and the scrap is not out of the manufacturing activity. Hence there is no TCS provision is required.

The RG1 Sales register is to be updated whenever the sale of imported scrap is made with CVD, Cess on CVD, HSCess on CVD and AED.

help me


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1 Answer

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    Former Member
    Oct 13, 2008 at 09:52 AM

    Dear Sangshetty

    Is this a trading scenario?

    1) You are buying material from one country & sell it highseas to a customer

    2) You are selling the same material at Bond sales thru bonded warehouse

    3) You are transferring materials from bonded to your local wharehouse paying all duties & further sell it off taking cenvat credit

    In first case you are paying no duty

    Second case only VAT will come

    Third case BCD+ CVD + cess on cvd+ ecess on cvd + Cess + Ecess + AED

    You have to map the third case like depot sales. J1IJ while capturing materials

    J1IG while selling the same. In this case you passon the exact duty what you have paid to govt. The duty is not based on your selling price. So after you do pgi you do J1IG transaction which will pass percentage duty what you have paid first to the sales volume. In this case the pricing analysis tab wont reflect the actual duties

    Just try this


    Deepu Pillai

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    • Former Member

      Hi Deepu

      I am having a same scenario as mention below.

      Our client is importing material and selling material locally in India. At time of IMPORT thaey are paying CVD and other duty. Now they are treating as like depot sale only. So irrespective of sale price they are charging duty in outgoing invoice same as they have paid at time of import.

      So i have maintainf RG23D register and at time of GRN and input CVD is passed to BED account and same for ECess and HECess also. Now i am creating J1IH at time of outgoing so system calculate respective duty base on mother(reference i/p) invoice.

      Now my main problem is how can i get same duty in my commercial invoice(Billing) ? . For domestic purchase and sale i have assigend 356(IN Depot) calculation routine. SO system pick same duty calculated at time of J1IH. How can we map same in case of import also.

      Thank you so much in Advance.