We are engaged in the manufacture of vehicles and its parts. We sell spare parts to our subsidiary as well as to unrelated buyers. Our subsidiary sells the parts to its customers. Please advise, the methodology to be adopted under the Central Excise Act, 1944 for determining the value of goods sold to our subsidiary.
In case of goods sold to subsidiaries, the value of goods is determined as per Rule 9 and Rule 10 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2002. As per Rule 10 where whole or part of the excisable goods are sold by the assessee to or through a subsidiary then the value shall be determined in accordance with Rule 9. As per Rule 9, if the goods are sold by the related party (i.e. subsidiary) then the value of goods shall be the normal transaction value (i.e. the value at which the greatest aggregate quantity of goods are sold) at which these goods are sold at the time of removal by the subsidiary.
Therefore, in the present case, value of parts sold by you to the subsidiary would be the normal transaction value at which such parts are sold by the subsidiary to its customers.
No Cenvat credit after six months
We are a Delhi-based interior decorator. We are charging service tax on our invoice for interior decorating services provided by us. Further, we take Cenvat credit of the service tax paid on the services received by us.
We have recently learnt that in the Budget, a provision has been inserted as per which Cenvat credit cannot be taken after six months from the date of invoice. Recently, during our statutory audit, our auditors have highlighted that we have not taken credit of approximately R4 lakh which pertains to invoices prior to six months. Please do let us know if we can take the credit.
In the Union Budget 2014-15, Rule 4 of the Cenvat Credit Rules, 2004 have been amended to include a provision which denies Cenvat credit on the basis of an invoice which has been issued six months prior to the date of availing of it. However, the amendment would be effective from September 1. Therefore, no time period has been prescribed for availing of Cenvat credit up to 31 August 2014. Basis the above discussion, you can take Cenvat credit of service tax pertaining to the relevant invoices, provided the credit is availed of prior to September 1.
E-way bills for movement of goods
We are an electronics goods dealer in Maharashtra registered under VAT and CST laws. We have more than 20 places of business in states outside Maharashtra. We are transferring goods from a warehouse located in Maharashtra to other states warehouses and vice-versa. Please clarify whether electronic way bills are mandatory for movement of goods.
No, the electronic way bills are not yet made mandatory for movement of goods. Recently, vide Notification No. VAT 1514 / CR 80 /Taxation-1 dated 23 June 2014, the Draft Rules have been issued and circulated in the public domain for discussion purposes and inviting comments until July 25, 2014. It is to be noted that this is not yet effective, and a notification is to be published. However, as per the draft rules every consignor, consignee or claimant of goods situated within the state shall be required to generate the e-waybill on the website before the entry or exit of goods within or from the state. Therefore, we have to wait for the date from which the various e-waybills mentioned above shall be required to be generated for inter-state and intra-state movement of goods.
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