Auto components
Machining, forging, sheet metal, castings and assemblies for vehicle makers and tier-one suppliers. From our Nashik office we work on price revisions, customer tooling, job work, scrap and bank finance for these units.
Last reviewed 1 October 2026
Auto component makers in Nashik machine, forge, stamp and assemble parts for vehicle makers and their tier-one suppliers. Their tax and finance questions are less routine than the production. Price revisions are settled late. Tooling belongs to the customer, and a part may visit three process houses before it is finished. Scrap is sold every week, while the bank, the books and the GST returns each count stock in a different way.
This page describes those issues and the way we work on them from Nashik. Types of work are described; no clients are named.
The issues auto component makers face
Auto component units in Satpur, Ambad and Sinnar sell into a Maharashtra supply chain led by vehicle makers and their tier-one suppliers. Four commercial terms drive most of their tax work: annual price-downs, customer-owned tooling, job work in both directions and long credit periods. Each one can leave a gap between the invoice, the books and the GST return that is found only years later. The notes below are general and state the law as it stands at 1 October 2026; they should not be read as advice on any particular set of facts.
Price revisions and credit notes
Annual price-downs and retrospective revisions are often agreed months after dispatch. Each one needs a credit or debit note under section 34 of the CGST Act within its time limit, and the customer must reverse its credit to match. A note issued late cannot reduce the tax already paid. The Finance Act, 2026 changes the conditions for post-sale discounts in section 15(3)(b) and section 34; until the Government notifies the date, the old conditions apply. A revision also changes the cost sheet, and it may change the value of stock on hand.
Customer-owned tooling
Where an OEM provides moulds and dies free of cost, their value is excluded from the value of the parts, unless the contract made the tooling the supplier's own cost (CBIC Circular 47/21/2018-GST). If the contract made the tooling your cost and the OEM supplied it anyway, its amortised cost is added. Tooling that appears in neither the fixed-asset register nor the job-work register is a frequent source of stock and GST queries.
Job work in both directions
Forgings go to Satpur heat-treatment shops, machined parts are sent for plating or painting, and assemblies return for final inspection. Section 143 of the CGST Act governs each movement, with its one-year and three-year return limits; goods not returned in time are treated as supplied, with tax and interest due. Since 22 September 2025, most engineering-style job work has carried GST at 18%, and the rate on each process should be checked against the notified entry. Where a part passes through three or four process houses, challans, ITC-04 and the stores register seldom agree without regular reconciliation.
Scrap sales and TCS
Turnings, borings and runners are sold every month. Tax is collected at source under section 394(1) of the Income-tax Act, 2025 (section 206C(1) of the 1961 Act), and the Finance Act, 2026 set the rate at 2% from 1 April 2026. An officer or stock auditor usually asks two questions first: how the scrap is classified for GST, and whether scrap sold matches scrap generated.
Long credit and MSME suppliers
Customers commonly pay in 60 to 90 days. Micro and small suppliers to the unit must still be paid within the period section 15 of the MSMED Act, 2006 allows: the period agreed in writing, capped at 45 days, or 15 days where nothing is agreed. Late payment defers the income-tax deduction (section 37(2)(g) of the Income-tax Act, 2025; section 43B(h) of the 1961 Act), so a cash gap with the OEM becomes a higher tax bill for the year.
Stock statements and the bank
Cash credit limits rest on drawing power from stock and debtors. When the monthly stock statement, the books and the GST returns give three different figures, the stock audit or the annual renewal will expose the difference. Work-in-progress and free-issue material account for most of these gaps.
How we work with auto component makers
We begin at the document where the difference first appears: the job-work challans, the cost sheet, or the invoices that carry a price revision.
GST, credit notes and job work
Credit notes for price revisions are issued within time, job-work lots are tracked and ITC-04 is filed from the same records, so that credit stays with the right party. See GST.
Costing for price-downs
Cost sheets rebuilt from the bill of materials, the routing and actual rejection rates, giving the price-down discussion with the customer a tested figure. See manufacturing finance.
Stock and working capital
Inventory valuation and physical counts reconciled to the books. Stock statements are matched to the accounts before the bank reviews them.
Income tax and TDS
Year-end tax computation, TCS on scrap and tax deducted at source, along with assessments and notices. See taxation.
MIS by product and customer
Results by part number, customer and plant, prepared from the books. See business advisory.
Auto components in Nashik and the supply chain
Nashik units supply vehicle makers and tier-one plants in Nashik, Pune and further afield. A Sinnar forging unit may machine parts for an assembler elsewhere in Maharashtra, and a Satpur shop may share a customer with a supplier in another industrial belt. The commercial terms are alike at either end of that chain. We work with clients in Pune and elsewhere in Maharashtra from our Nashik office, as the Maharashtra page explains.
Many of these units sit within family groups that also run a trading firm or a second plant. Related pages cover engineering, manufacturing and exporters.
We visit clients in Nashik district. Where we are a company's statutory auditor, section 144 of the Companies Act, 2013 limits the other services we may provide to that company and to its holding or subsidiary company.
Common questions
Our customer has revised prices for the last two quarters. What do we need to do?
Credit notes or supplementary invoices should be issued under section 34 of the CGST Act against the affected invoices, within the time limit, and the customer must adjust its credit to match. Since the revision changes the cost sheet, the value of stock on hand may change as well.
Our OEM has given us moulds free of cost. Do we add their value to our invoices?
Their value is excluded if the moulds belong to the OEM and the contract does not make them your cost, as CBIC Circular 47/21/2018-GST states. If the contract made the tooling your cost and the OEM supplied it anyway, its amortised cost is added.
We sell machining scrap every month. What do we need to watch?
Tax must be collected at source under section 394(1) of the Income-tax Act, 2025 (section 206C(1) of the 1961 Act), then deposited and reported on time. GST is charged on the scrap at the rate for its classification. The quantity sold should agree with the scrap that production records show as generated.
Parts move through three job workers before they are finished. What usually breaks?
The challan trail, ITC-04 and the stores register stop agreeing. Every movement remains under section 143 of the CGST Act, and inputs must return within one year. When open lots are reconciled each month against physical stock at each process house, gaps are found before any notice is issued.
Other industries: Manufacturing, Engineering, Exporters, Family businesses
Where we work: Chartered Accountants in Nashik, Chartered Accountants for businesses across Maharashtra