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Former Member
Jun 09, 2011 at 04:18 PM

Process relevant to subcontracting and issue

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Hi,

There is a material like mobile battery purchased from X vendor, but this is sent to the party Y and he will be inserting the battery into the mobile and he will make a complete assembly of the same and send it back to us..

We have mapped this in the following way

1. battery sent to the Party Y (after purchasing) as a child component

2. Subcontractor will add his parts also along with the battery at his place, so we need not show this assembly process and only Mobile as a main component coming to us.

3. Total cost of mobile will be cost of mobile battery + mobile accessories + assembling service charges

Whether the mapped process is right?

Can the subcontractor add some more parts to the parts (battery) which we have sent through subcontracting challan and is this has any legal implication?

Are should we treat this as subcontracting with duty?

regards,

Sanjana