Separate records are a must

CHATROOM

Manufacturers must maintain separate records for dutiable and non-dutiable items.

We are a manufacturing unit, manufacturing excisable products under chapter 4820/4000 (manifold business papers) and non-excisable products under chapter 4901/4907 (cheque books, etc.) We are using inputs and taking Cenvat credits for the manufacturing of final products. Some inputs are used separately for excisable and non-excisable products . But some are used commonly.We want to know: Whether we have to maintain separate books for excisable goods and non-excisable goods? Whether we have to give a declaration to the excise department for the same. The rate of duty for excisable goods is 8 per cent. Is there a any value cap to this?

When you manufacture dutiable and non-dutiable products, you have to maintain separate records and take Cenvat credit on only those inputs that are used in the manufacture of dutiable final products. In case you have common inputs for dutiable and non-dutiable final products, and you are not in a position to maintain separate records, you can take Cenvat credit of the duty paid on the common inputs but you have to not only pay full duty on the final products that are dutiable but you will have to pay 10 per cent of the price on the clearance of the final products that are not dutiable. In any case, you cannot take Cenvat credit on those inputs that are exclusively used in the manufacture of non-dutiable final products. The relevant legal provisions are covered under Rule 6 of the Cenvat Credit Rules, 2004, where certain exceptions are also listed in sub-rule (3) and sub-rule (6) to the said Rules. The procedure for giving declaration before availing Cenvat credit has been done away with but you must give the relevant details of your dutiable and non-dutiable products In your application for excise registration ad of course, you have to maintain suitable records and registers and submit periodic returns. I do not understand your query about value cap. I can only say that valuation issues have to be dealt with in accordance with Section 4 and 4A of Central Excise Act, 1944.

We are manufacturer of human and animal vaccines. There is no excise duty on our items. We also export our vaccines and seek export incentives. Through some reliable sources we came to know that we can take the benefits through Duty Entitlement Pass Book (DEPB). But when we checked DEPB rates for our products we found that there is no DEPB rate given for our product. We would like to know whether we can take the benefit through DEPB or not and is there any other benefit available to us.

DEPB is available against export of a particular item only if the Director General of Foreign Trade (DGFT) has notified a DEPB rate for that item through a public notice. If no DEPB rate is notified you cannot get a DEPB. You may also take note that where Standard Input Output norms are not notified for an item, DEPB rate will not be notified.

We intend to import parts of wireless radio terminal which attracts CVD + four per cent SAD. After assembling we intend to sell the final product in India which attracts excise and VAT. Please let us know whether we can get the modvat for four per cent SAD in payment of excise duty.

The four per cent CVD is levied on imported goods under sub-section (5) of Section 3 of the Customs Tariff Act, 1975. Sub-Rule (1) (viia) to rule (3) of Cenvat credit rules, 2004 specifically allows Cenvat credit of the additional duty leviable under sub-section (5) of Section 3 of the Customs Tariff Act, 1975.

Ours is an advertising company. It is registered with the service tax authorities in Mumbai. We have branches elsewhere. On print media bills no service tax applicable but on electronic media there is a service tax which we regularly levy and get paid by clients.

Of late one of our clients has deducted source on art and production work. The client says that VAT is applicable on the CD and paper on which art work is done. We clarified to them that we are a service agency and not selling the paper or CD but the art work done on such paper or CD loaded with art work, as the case may be. It is also clarified that our agency is not registered under VAT and therefore we cannot claim the VAT input credit. The client is adamant and making payment after VAT deduction. I do not see any justification for your client's stand. Perhaps, he is treating your contract as a works contract, whereas I don't see how it is.