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May 2, 2001
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Money > Business Headlines > Report May 2, 2001 |
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Job workers out of 16% Cenvat on readymadesSantosh Tiwary The liability of 16 per cent Cenvat, effective from May 1, on ready-made garments, manufactured on job-work basis, will be on the merchant manufacturer and not on the job workers. According to revenue department officials, all merchant manufacturers will have to get registered for the purpose and the duty liability will have to be paid by the merchant manufacturer at the time of removal of garments from his registered premises. However, a merchant manufacturer can authorise a job-worker to pay the excise duty on his behalf, they say. The amendments to the Finance Bill, passed by the Lok Sabha last week, have exempted manufacturers of handkerchiefs, shawls, scarves, mufflers, mantillas, veils, ties, bow-ties, cravats, gloves and other clothing accessories from the 16 per cent Cenvat. Raincoats, undergarments and clothing accessories have also been exempted from payment of excise duty. The assessable value for calculating 16 per cent Cenvat on ready-made garments has been fixed at 60 per cent of the retail price. According to sources, to keep the small ready-made garments manufacturers out of the duty net, the SSI excise duty exemption has been extended to the sector. The clearances up to Rs 10 million from May 1, 2001 during the remaining part of the current fiscal, will be exempt from excise duty. Clearances of garments up to April 30, will be taken into account for computing the exemption limit of Rs 10 million. The duty paid on clearances before May 1, 2001 will not be eligible for any refund. Clearances by or on behalf of a manufacturer from different factories or job-works will be clubbed together while considering the Rs 10 million exemption limit. Similarly, clearances of one factory, if run by different manufacturers, will be clubbed together for the purpose. The merchant manufacturers will also be able to take the SSI excise exemption benefits. A garment manufacturer producing goods on his own account will be eligible for taking duty credit under Cenvat rules on the inputs and capital goods. Provisions have also been made for providing deemed credit of 20 per cent of the excise duty liability in the cases where it won't be feasible to take the actual credit of duty paid on inputs. Powered by YOU MAY ALSO WANT TO READ:
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