Amortisation cost, Central Excise

[vishal]

we make dies as per customer job. Thi invoice to made by paying one time Excise Duty This die is further used as make number of jobs as per customer orders. the please tell me shall we liable to Dies Amortision cost for that die.

Posts / Replies

[Surender Gupta]

The cost of dies should be amortized where such dies have been provided free of cost. However, in case of job work, where the raw material is being supplied by the principal manufacture who has supplied the dies and liable to pay excise duty on the goods received from the job worker after job working activity, such job worker may choose not to amortize the cost of dies.

[Dilip darji]

I understand that you are manufacturing a die (as per the drawings of customer) and the same die is used by you in your factory for manufacture of number of jobs for the same customer. In such a circunstance, you need not to pay excise duty on die manufactured in your factory and used within the same factory of production, for manufacturing other excisable goods. Since you will have an agreed contract price with the customer for FG being sold by you, you need to duty onky on such sale price. In the cases where the goods manufactured are not sold by you, you need to amortise the cost of Die, dependinmg upon it usage life.