Levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of ₹ 1000 or more - Central Excise - TRADE NOTICE NO. 05/2016-17

GOVERNMENT OF INDIA OFFICE OF THE PRINCIPAL COMMISSIONER CENTRAL EXCISE SERVICE TAX PATNA C.R. (ANNEXE) BUILDING, BIR CHAND PATEL MARG, PATNA-800001. C. No. IV(39)38//Tech/CCE/PAT/14/6864-74 Dated: 05-07-2016 TRADE NOTICE NO. 05/2016-17 Attention of the trade is invited to Circular No. 1031/19/2016-CX Dated 14.06.2016 issued vide F. No. 332/5/2016-TRU by Government of India, Ministry of Finance, Department of Revenue; TRU, CBEC, New Delhi regarding Levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of ₹ 1000 or more. The contents of the aforesaid circular are reproduced below:- Sub : Levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of ₹ 1000 or more. Several representations have been received in the ministry from the trade regarding scope of the levy of excise duty on readymade garments and made articles of textiles bearing a brand name or sold under a brand name and having a retail sale price of ₹ 1000 Or more in is year's budget. 2. The issue :raised is whether excise duty would be chargeable on readymade garments or made up articles of textiles which are sold by a retail store which merely affixes the retail sale price the readymade garments or made up articles of textiles which are purchased by such retail store from the open market. 3. The issue has been examined in the Ministry. The present levy is not oh all readymade garments and m de ups, and is restricted only to readymade garments and made up articles of textiles bearing a brand name or sold under a brand name and having retail sale price (RSP) of ₹ 1000 or above. Further, to avoid disputes and minimize duty evasion, it has also been provided that affixing a brand name on the product, labeling or relabeling of its containers or repacking from bulk packs to retail packs or the adoption of any other treatment to render the product marketable to the consumer, shall amount to manufacture. 3.1 For this purpose, Brand name means a brand name, whether registered or not, that is to say, a name or a mark, such as a symbol monogram label, signature or invented words or any writing which is used in relation to a product, for the purpose of indicating, or so as to indicate, a connection in the course of trade between the product and some person using such name or mark with or without any indication of the identity of that person. 4. However, such retailer shall not be liable to pay excise duty if: a) the retail sale price of such readymade garments or made up articles of textiles is less than ₹ 1000, or b) the aggregate value of clearances for home consumption by such person is less than ₹ 1.5 crore in a year [provided aggregate value of clearances during previous financial year was less than ₹ 4 crore]. 5. Further, merely because the outlets [shop] of a retailer, from where readymade garments or made ups are sold, has a name, say M/S XYZ and sons, the readymade garments or made ups sold from such outlet [shop] cannot be held as branded readymade garments or made ups and become liable to excise duty. Needless to say, deemed manufacture and liability to excise duty will arise only if such retailer affixes a brand name on the readymade garments and affixes a label bearing the R P on the packages containing the readymade garments of ₹ 1000 or above. 6. Further, it is hereby directed Chat field formations shall not visit individual retail outlets or retail chains, except based on specific inputs regarding duty evasion and with the approval of the jurisdictional Commissioner or Additional Director General or above, (Issued in File C. No. IV(39)38//Tech/CCE/PAT/14/) (Anand Kumar) Joint Commissioner