We are manufacturing readymade garments on behalf of a brand name owner. We affix his brand name on the goods that we clear. We do not have any other clearances in our own name. Are we required to take Central Excise Registration?
The Central Excise Rules have been amended to prescribe that the person who gets the goods falling under Chapters 61, 62 or 63 (heading 63.01 to 63.08) manufactured on his own account on job work shall pay the duty leviable on such goods as though the goods were manufactured by him. Therefore, the brand name owner (and not the job-worker) is required to register and comply with all the provisions of Central Excise law, if he opts to pay the duty. However, if the brand name owner has opted to authorise you, as his job-worker, to pay the duty leviable on the goods, then you have to obtain registration.
Besides, if you use your own inputs and not the inputs supplied by the brand name owner, you cannot be considered a job-worker and so, you have to obtain registration and discharge duty liability. It is not enough if you manufacture goods or undertake a process on behalf of and under instructions of the brand owner to be considered a job-worker. The inputs or goods should also have been supplied by the brand owner or by a person authorised by him, to be considered as a job-worker.
The Finance Minister had announced that implementation of Point of Taxation Rules, 2011 will be postponed to July 1, 2011. Can you please give reference of the relevant notification?
Point of Taxation Rules, 2011 have come into effect from April 1, 2011. However, through notification No. 25/2011-ST dated March 31, 2011, certain amendments have been made to the said Rules. Transitional Provisions at the amended Rule 9 now say that ‘nothing contained in this sub-rule (sic) shall be applicable, where the provision of service is completed or where invoices are issued prior to the date on which these rules come into force, provided that services for which provision is completed on or before 30th day of June, 2011, or where the invoices are issued up to the 30th day of June, 2011, the point of taxation shall, at the option of the taxpayer, be the date on which the payment is received or made as the case may be’.
In short, tax payers have an option to continue to pay tax on the basis of ‘payment receipt’ till June 30, 2011. The transitional provisions will apply to all invoices issued before 31.03.2011 for taxpayers who switch over to the new rules on 01.04.2011. Those taxpayers who like to shift to the new rules on 01.07.2011 would have similar protection in respect of invoices issued before the date they switch over to the new rules. The benefit has also been extended to services when provision has been completed before 01.04.2011 or 01.07.2011, as the case may be.
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