Dealer Registration mandatory for transit sale, says Chief Commissioner - Ease of Doing Business?
BY Notification No. 8/2015-C.E. (N.T.), dated 1st March 2015, the following proviso is added to Rule 11(2) of the Central Excise Rules, 2002.
"Provided also that if the goods are sent directly to any person on the direction of the Registered dealer, the invoice shall also contain the details of the registered dealer as the buyer and person as the consignee, and that person shall take Cenvat credit on the basis of the registered dealer's invoice".
DDT was informed by a netizen that the field formations are of the view that whoever orders goods on the manufacturer and directs the manufacturer to send the goods to ultimate user directly are required to take "Dealer's" Registration
We carried the mail sent by the netizen in DDT 2584 under the caption - CBEC - Please Listen; Please spare us of 'registration' - Rule 11 of CER, 2002.
Incidentally, we had also carried an article on the aforesaid issue in our ST se GST tak column.
DDT was under the impression that the field formations have been taking such a view without any official backing.
For once, we were wrong.
We are made to understand that there is a letter F.No. IV/16-Tech-15/CCO/MCX-I/2012 dated 21st April, 2015 addressed to the All India Non-Ferrous Metal Industries Association by the Joint Commissioner, Office of the Principal Chief Commissioner of Central Excise, Mumbai Zone-I in response to their seeking an urgent clarification as to "Whether in case of direct/transit sale by a trader from the Manufacturer to the end-user - Do a trader required to be registered as a dealer".
The letter clarifies as below -
1. The CENVAT credit will be available on Registered Dealers Invoice, hence registration of Dealer with Central Excise is must from 01.03.2015.
2. Requirement of Godown has not been done away, and it is necessary, if the Registered Dealer wants to store the goods.
3. Any amendment in the format of Dealer's invoice can be done only by the Central Board of Excise and Customs.
4. There is no provision for availing CENVAT credit on the strength of Manufacturer's invoice when the goods are sold through a non-registered dealer.
This issues with the approval of the Chief Commissioner, Central Excise, Mumbai Zone-I.
It is high time that the CBEC intervenes and comes out with a clarification lest this issue should snowball into a major controversy which will, in the final run, not fetch any revenue to the government but certainly assist Consultants and Advocates laugh all the way to the bank.
Was the amendment beneficial or was it one more method of harassing the assessees?
If this is called "Ease of doing business", so be it…and we are supposed to migrate to GST by this time next year!