Sale of imported scrap

Question

Hi,
The scrap is either imported or purchased through high sea purchase and if the material is found inferior quality the same will be returned to the party or on the supplieru2019s advice the material will be sold to another customer.
The AED paid on the imported material or the material purchased through high seas purchase will be transferred to the supplier or the new customer. The required tax Procedure will as follows:
Assesable Value          100.00                   622,768.57
CVD     14%             14.00      14% on assesable value     14%          87,187.60
Cess on CVD     2%               0.28      2% on CVD     2%            1,743.75
HSCess on CVD     1%               0.14      1% on CVD     1%                871.88
Customs Cess     2%               0.29      2% on CVD, Cess and HSc on CVD     2%            1,796.06
Customs Hscess     1%               0.14      1% on CVD, Cess and HSc on CVD     1%                898.03
AED     4%               4.59      4% on the above total     4%          28,610.64
               119.45                   743,876.53
TN Vat     4%               4.78      4% on the above total     4%          29,755.06
Gross Value               124.22                   773,631.59
The above calculation is followed on payment of import duty. Out of the duties mentioned above, except cess on customs and HSCess on customs, other duties are eligible for input credit. Hence on sale we will have to reverse the input credit taken.
At present, we are selling the scrap which is arising out of our manufacturing activity. The provision of TCS is applicable on sale of these scraps. In the earlier one it is only trade and the scrap is not out of the manufacturing activity. Hence there is no TCS provision is required.
The RG1 Sales register is to be updated whenever the sale of imported scrap is made with CVD, Cess on CVD, HSCess on CVD and AED.
help me
shrinath

Answer 1

Dear Sangshetty
Is this a trading scenario?
1) You are buying material from one country & sell it highseas to a customer
2) You are selling the same material at Bond sales thru bonded warehouse
3) You are transferring materials from bonded to your local wharehouse paying all duties & further sell it off taking cenvat credit
In first case you are paying no duty
Second case only VAT will come
Third case BCD+ CVD + cess on cvd+ ecess on cvd + Cess + Ecess + AED
You have to map the third case like depot sales. J1IJ while capturing materials
J1IG while selling the same. In this case you passon the exact duty what you have paid to govt. The duty is not based on your selling price. So after you do pgi you do J1IG transaction which will pass percentage duty what you have paid first to the sales volume. In this case the pricing analysis tab wont reflect the actual duties
Just try this
Regards
Deepu Pillai