TMI BlogProcedure for Job Work for a TraderX X X X Extracts X X X X X X X X Extracts X X X X ..... I import Steel Coils from China, give them to a factory to convert them into pipes. I hold only a "Dealer" registration under Central Excise. Since I am not a "Manufacturer" under Central Excise I can not avail the benefit of Notification 214/86 . At present I sell the imported coils to the factory on High Seas Sales basis and purchase the finished steel tubes from them, which results in payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of VAT (4%) to them. Since I sell the tubes on CST basis, the rate is only 2%, I lose 2% on Sales tax. Further there is a hassle of HSS Sale of coils, sales of pipes etc. Can anybody suggest an easier way to handle this matter. Can the factory take credit of CENVAT available on my Bill of Entry and use it against the CENVAT payable for my finished goods. - Reply By R K Rajwanshi - The Reply = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Deliver steel coil to manufacturer under challan prescribed under central excise rule and opt payment of excise duty at the end of jobworker he may claim cenvat credti . and he may deliver to you without payment of any kind of vat or cst as case may be. R K Rajwanshi - Reply By Mahaganapathi V - The Reply = Sir I think the present system what you are following is right. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... you are not a manufacturer you cannot covert the coils into pipes. So you sell to outsider and purchase back the finished goods with tax. While you make the sale you do CST and collect only 2 % and you feel you are losing 2% due to VAT difference. This should be part of your costing and there cannot be any remady to your activity in the absence of your entitlement to do so. At the same time one ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot sell the product at his cost. Certainly you will load your profit on the input cost. The 2% difference should form part of this. - Reply By Ritesh Kanodia - The Reply = Following alternate options are available in this case: a. The imported raw materials can be imported directly in the name of the Job worker. The term "importer" under the Customs Act has been defined to mean the owner or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any person who acts as the importer. In such case, the Job worker would be in a position to take credit on the basis of Bill of Entry filed. The disadvantage is that Job worker will have to obtain IEC and pay appropriate Customs duty. b. You can import the goods in your own name. You can then pass the credit to the Job worker by raising a First Stage Dealer Invoice. In this regard, it is importa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to note that the term "First Stage Dealer" inter alia means a person who "purchases" goods from an importer. The term "purchase" has been defined under the central Excise Act,1944 to mean any transfer of the possession of goods by one person to another in the ordinary course of trade or business for cash or deferred payment or other valuable consideration. Hence, the term purchase under Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mean transfer of possession. - Procedure for Job Work for a Trader - Query Started By: - SRIVATSAN RAJAN Dated:- 10-5-2011 Central Excise - Got 3 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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