Purchase of finished goods from principal - contract manufacture, Central Excise

[Jatinder Maan]

WE ARE A CONTRACT MANUFACTURE OPERATING UNDER LOAN LICENCE,CAN WE PURCHASE THE FG FROM OUR PRINCIPAL (PRODUCED ON BEHALF OF OUR PRINICPAL).IF YES,THEN HOW?CAN WE RAISE SELF INVOICE.

Posts / Replies

[Surender Gupta]

You mean, fist you would manufacture goods under loan licence on behalf of Principal and thereafter purchase such goods as independent buyer. Subject to the contrary in the licnence terms and conditins, I am of the view there is no restriction under the tax laws about this proposition.

[Jatinder Maan]

can we adopt this practise on routine basis.(i.e purchasing from principal and selling to our customer after repacking).Will it be considered as manufacturing process.