CBIC issues Clarifications on Special Procedure for Manufacturers under Notification No. 04/2024 [Read Circular]

The Central Board of Indirect Taxes and Customs ( CBIC ) has issued Circular No. 208/2/2024-GST, providing clarifications on various issues related to the special procedure for manufacturers as per Notification No. 04/2024-Central Tax dated January 5, 2024.

The key clarifications issued are as follows: —

1. Machine Identification: For old or second-hand machines lacking make and model numbers, manufacturers must provide the year of purchase as the make number. A machine number is mandatory and can be assigned if unavailable.

Clarification: It was clarified that in Table 6 of FORM GST SRM-I as notified vide Notification

No. 04/2024-CT dated 05.01.2024, make and model number are optional.

However, where make of the machine is not available, the year of purchase of the machine may be declared as the make number. It is also clarified that the machine number is a mandatory field in Table 6 of FORM GST SRM-I to be filled up by the manufacturer.

If the machine number is not available either on the machine or as per the available documents/ records, then the manufacturer may assign any numeric number to the said machine and provide the details of the same in Table 6 of FORM GST SRM-I.

2. Electricity Consumption Rating: If not available, the rating must be calculated and certified by a Chartered Engineer, and this certificate must be uploaded with FORM GST SRM-I.

It is clarified that electricity consumption rating of the packing machine is to be declared in Table 6 of FORM GST SRMI on the basis of details of the same as available either on the machine or in the documents/record of the said machine. However, if the same is not available either on the machine or in the documents/records, then the manufacturer may get such electricity consumption per hour of the said machine calculated through a Chartered Engineer and get the same certified by the said Chartered Engineer in the format prescribed in FORM GST SRM-III, as notified vide Notification No. 04/2024-CT dated 05.01.2024. The said electricity consumption rating can be declared in Table 6 of FORM GST SRM-I accordingly.

The copy of such a certificate of the Chartered Engineer needs to be uploaded along with FORM GST SRM-I. The details of the documents so uploaded needs to be provided in Table 10 of the said form. It is also clarified that in cases where there are certificates of Chartered Engineer for more than one machine, then all such certificates may be uploaded in a single PDF file.

3. Goods with No MRP: For goods without an MRP, such as those for export, the sale price should be entered in FORM GST SRM-II.

In cases where there is no MRP of the package, then the sale price of the goods so manufactured shall be entered in Column 8 of Table 9 of FORM GST SRM-II as notified vide Notification No. 04/2024-CT dated 05.01.2024.

4. Chartered Engineer Qualifications: The engineer must be a practicing Chartered Engineer with certification from the Institute of Engineers India (IEI).

It is clarified that a Practising Chartered Engineer having a certificate of practice from the Institute of Engineers India (IEI) is qualified to provide Chartered Engineer certificate under the special procedure notified vide Notification No. 04/2024-CT.

5. SEZ Exclusion: The special procedure does not apply to manufacturing units in Special Economic Zones ( SEZ ).

It is clarified that the special procedure as notified vide Notification No. 04/2024-CT dated 05.01.2024 is not applicable to the manufacturing units located in Special Economic Zones ( SEZ ).

6. Manual Processes Exclusion: The procedure is not applicable to manual packing operations or manual seamers/sealers.

It is clarified that the said special procedure notified vide Notification No. 04/2024-CT dated 05.01.2024 is not applicable in respect of manual seamer/ sealer being used for packing operations. Further, it is also clarified that the said special procedure is not applicable in respect of manual packing operations such as those in cases of post-harvest packing of tobacco leaves.

7. Multiple Machines: The machine used for final packing must be reported in FORM GST SRM-I.

It is clarified that in a manufacturing process there may be different machines being used such as one for filling of packages, another for putting seal on the packages and another for final packing. The detail of that machine is required to be reported in Table 6 of FORM GST SRMI which is being used for final packing of the packages of the specified goods.

8. Job Work/Contract Manufacturing: The procedure applies to all involved, with the principal manufacturer responsible if the job worker is unregistered.

It is clarified that the special procedure shall be applicable to all persons involved in the manufacturing process including a job worker / contract manufacturer. However, if the job worker/ contract manufacturer is unregistered, then the liability to comply with the said special procedure will be of the concerned principal manufacturer.

Trade notices will be issued to publicise the contents of this circular to ensure uniformity in law implementation across field formations.

To Read the full text of the Order CLICK HERE

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