CA Bhavin Mehta

CA Bhavin MehtaExcise duty applicability of ready-made garments

  • Applicable to Branded Ready-Made Garments i.e when ready-made garments bear or sold under a brand name.
  • Optional levy of 2% (without Cenvat credit) or 12.5% (which Cenvat credit) shall be applicable if RSP is 1000 or above.
  • For RSP below 1000/- no Central excise duty shall be applicable.
  • The tariff value is being revised from 60% of RSP i.e Central excise duty shall be payable on 60% of RSP.
  • Central excise duty shall not be applicable to retail tailoring establishments that stitch garments as per the size & style specification of individual customers.
  • Central excise duty is applicable on Brand Name Owner. The brand name owner shall be required to register and complied with all the provisions of Central excise law.
  • Brand name owner will have the option to authorise job worker to pay Central excise duty. In case of such authorisation, the job worker will have to get registered with the Central excise Department.
  • To act as a job worker, the raw material should be procured from the brand name owner.
  • Manufacturers who intend to avail Cenvat credit on inputs or inputs contained in goods lying in stock shall keep the stock declaration of finished goods, goods in process & inputs, as on 29.02.2016 duly certified by Chartered Accountant.

SSI exemption:-

  • The eligibility for availing of SSI exemption in 2015 – 16 for the month of March 2016 is that the value of clearances for home consumption from one or more manufacturer from one or more unit, should not exceed RS. 4 crore in the previous financial year 2014 – 15.
  • SSI exemption for the month of March 2016 will be 12.5 lakhs.
  • The computation of SSI exemption should be backed by Chartered Accountant certificate based on the books of accounts of 2014 – 15.
  • The value for the computation of SSI exemption would be the tariff value of the goods.

Goods Return:-

  • Full exemption from Central excise duty will be available to duty paid goods return to the manufacture up to 10% of the value of clearances for home consumption.
  • Intimation of the receipt of goods return to be submitted to the Central excise authorities within 48 hours.
  • Proper accounts/record for receipt, finishing operations & dispatch of returned stock to be maintained.

Payment of Central excise duty & Filing of Central excise Return: –

  • Those assessee who are availing SSI exemption will have to make payment online, quarterly by 6th of the next month
  • Assessees who are not availing SSI exemption will have to make payment online, monthly by 6th of the next month.
  • Quarterly return to be filed in Form ER 8 as per the 4th proviso contained in Rule 12(1) of the Central excise Rules, 2002. (Since entry for goods falling under 61,62 & 63 has been made in Notification No. 1/2011 CE)

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December 2023