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TMI BlogExcise duty on readymade garments - Changes effective from 1st May, 2001X X X X Extracts X X X X X X X X Extracts X X X X ..... have been issued in this regard. The salient features of the new scheme are indicated below. 2. Excise duty at the rate of 16% shall now apply to all garments falling under Chapter 62 of the Central Excise Tariff. However, clothing accessories including handkerchiefs, shawls, scarves, mufflers, mantillas, veils, ties, bow ties, cravats, gloves falling under heading No. 62.02 have been exempted from excise duty. Exemption from excise duty has also been provided to raincoats and undergarments. Notification No. 21/2001-Central Excises has been issued in this regard. The exemption will be effective from 1st May, 2001. 3. It is understood that readymade garments, particularly those bearing brand names, are manufactured in a big way through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke to authorize any job worker to pay the excise duty on his behalf and the job worker so authorized undertakes to discharge the duty liability and comply with all the formalities required under the Central Excise Rules. It may be emphasized that this facility would be based on the authorization to be given in writing by the merchant manufacturer and the undertaking given by the job worker. The merchant manufacturer and the authorized job-worker may be advised to send a copy of such authorization and undertaking to the Deputy Commissioner/Assistant Commissioner and Range Superintendent in charge of the factory of the job-worker as also having jurisdiction over the merchant manufacturer. 7. Another salient feature is that the benefit of SS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer who gets the goods manufactured on his own account from a job-worker (rule 7AA) and discharges the duty liability himself shall also be eligible to take the actual credit of the duty paid on inputs supplied to the job-worker. The CENVAT Rules have been suitably amended for this purpose. The merchant manufacturer is required to maintain proper CENVAT accounts at his registered premises and to file monthly return as per the provisions of rule 57AE. 11. Provision has also been made for "deemed credit" in case it is not feasible to take the actual credit of the duty paid on inputs. The deemed credit shall be 20% of the excise duty liability on garment and can be claimed at the time of removal of the garments. For instance, assume t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a shirt declared is Rs. 1000, the assessable value of the shirt will be Rs. 600. In this context it is understood that the provisions of Standards of Weights and Measures Act, 1976, and the rules made under that Act are applicable to readymade garments. As such it is obligatory to indicate the maximum retail price. The person who is required to pay duty on readymade garments may be advised to indicate the MRP of the garments included in the consignment under assessment on the invoices so that the duty liability is correctly ascertainable. 14. It may be mentioned that where the garment manufacturer is exporting a substantial part of his production and his clearance for home consumption does not exceed the full exemption limit of Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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