central excise
n v sudhakar
(Querist) 23 December 2009
This query is : Open
I raised the following query:
Ours is a service industry and registered under Service tax. As a part of providing service we use packing material. To save the packing material cost, we bought one corrugation manufacturing machine and making cartons ourselves by purchasing craft paper. While billing to our customers we do not charge anything separately for packing. Our service charges are inclusive of packing material cost. Hence we did not approach Central Excise department for any registration.
Now there is an objection from Central Excise department stating that it comes under manufacturing and we are supposed to comply with central excise formalities.
Please advice on the above.
Regards
N V Sudhakar
For the above query I got the following expert opinion from Mr S Karunamoorthy:
Yes, it amounts to manufacturing.. cos ur converting an input material into another output having seperate merchandise. u have to register with central excise authority and has to pay off the duty thereon but the same could be collected from the customers as cost of goods.
With due respects I would like to know the following:
1. Duty to be paid on what value when we do not raise our invoice towards packing cost.
2. The total value of packing material we consume for providing our services is approx Rs. 30 lakhs per annum. Can this turnover be covered under exemption limits.
Regards
N V Sudhakar
