Regarding ITC on purchase

This query is : Resolved

jagdeepgupta (Querist)
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17 February 2021 I am a dealer of packing material Registered in UP VAT and purchased the goods from UP against Tax Invoice.

Further I sold the goods against form H to a manufacturer in UP who export their finished goods by using packing material supplied by me. and He issued form H to me

I have no any other sale and purchase except above

now my question is
May I got the refund of ITC or tax paid on purchase ?

Plz advice

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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17 February 2021 Form H not applicable under GST regime. Raise tax invoice on sale to manufacturer and claim ITC.

jagdeepgupta

jagdeepgupta (Querist)
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17 February 2021 This query for UPVAT for A/y 16-17

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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20 July 2025 Regarding your query on UP VAT for A.Y. 2016-17 about ITC and sales against Form H:

Under UP VAT, Form H is issued by a manufacturer/exporter to the dealer for purchasing goods without payment of tax or at a concessional rate, as the goods are for export production.
Since you are purchasing packing material and selling it to a manufacturer who exports finished goods, and you are receiving Form H from the buyer, your sales are tax-free sales under Form H.
Your question:
Can you claim refund of ITC or tax paid on purchase?

Answer:
Input Tax Credit (ITC) under VAT:
VAT laws before GST did not allow automatic credit of tax paid on inputs in case of exempt sales or zero-rated sales unless specifically allowed.
In most VAT states (including UP), sales made against Form H are tax-free sales and not exempt sales.
However, in VAT regime, there was no input tax credit mechanism like GST; instead, you could claim refund of tax paid on inputs used in zero-rated exports, subject to prescribed conditions.
Refund of tax paid on inputs:
You can claim refund of tax paid on purchases used for making sales against Form H under Section 16(3) of Central Sales Tax Act, 1956 or relevant state VAT rules.
Refund application needs to be filed with the VAT department with proper documentation including purchase invoices, sales invoices, Form H, etc.
The refund claim is typically for the tax paid on purchases used for sales made at concessional rate or tax-free under Form H.
No ITC adjustment:
Since this is VAT regime, there is no input tax credit adjustment, only refund of tax paid can be claimed.
Summary:
You cannot claim ITC under UP VAT but can apply for refund of VAT paid on packing materials purchased for sales made against Form H.
Ensure you keep all purchase invoices, sales invoices, and duly received Form H for refund claims.
Refund procedures and eligibility may vary, so consult the UP VAT department rules or a VAT expert for exact filing.

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