LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Input VAT Credit on Packing Materials

Hanspal Singh (Chartered Accountant) (58 Points)

31 December 2010

Please Help!!!

Can a Dealer engaged in the business of Exporting Tax Free Goods claim set-off for packing materials purchased by him?

Reply
Follow
Share

13 Replies

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 31 December 2010

Originally posted by : Hanspal Singh
	Please Help!!! Can a Dealer engaged in the business of Exporting Tax Free Goods claim set-off for packing materials purchased by him?

if the goods are Tax free in local vat rules, ( in case of local sale too) then u have to specify the packing materials specific in export bill/ packing list, to avail input credit,

Hanspal Singh (Chartered Accountant) (58 Points)
Replied 31 December 2010

So that means, in my VAT Returns Input Packing Credit should be taken and this can be set-off against Tax Free Export Sales??

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 31 December 2010

Originally posted by : Hanspal Singh
	So that means, in my VAT Returns Input Packing Credit should be taken and this can be set-off against Tax Free Export Sales??

when the export itself is tax free, how u can set off?

it will remain in balance and u can claim refund or set off against other vat sales,

Gopal Agrawal (.) (27 Points)
Replied 31 December 2010

As per my view if packing Material use for export good which is tax free so we can not claime input credit

SANKAR MAJUMDAR (COST ACCOUNTANT) (111 Points)
Replied 01 January 2011

As per the Vat Act of my state, which should be more or less similar to other states, in case of a trader input tax credit is available for tax paid on purchases of goods inside the state if such goods are for export sales. However, in case of manufacturer, input tax credit is available for tax paid inside the state on purchases of goods for use as a) raw materials b) packing materials and c) capital goods in the manufacture of taxable goods for the purpose of export sales.

It appears from the above that ITC (Input Tax Credit) on packing materials is available only to manufacturer and that too for manufacturing taxable goods that is meant for Export Sales.

Now since, no tax is levied on Export sales, the question of setting off the ITC with the tax liability on export sales does not arise. Now regarding availing the ITC and adjusting the same with other products, it appears that the packing materials should be used to manufacture taxable goods and not tax free goods. In addition, our Vat Act clearly says that ITC can not be availed on tax free goods.

Under the circumstances, in my opinion, since no input tax credit is allowed on sales of tax free goods, the tax paid on purchases of packing materials for exporting tax free goods should not be available as ITC.

poorva jain (student) (22 Points)
Replied 06 January 2011

please help

a shoe manufacturing firm purchase parts of machinery to maintain its efficiency,they show it under the repair and maintainence head, can they claim vat on it....??????

U S Sharma (glidor@gmail.com) (21056 Points)
Replied 07 January 2011

Originally posted by : poorva jain
	please help a shoe manufacturing firm purchase parts of machinery to maintain its efficiency,they show it under the repair and maintainence head, can they claim vat on it....??????

under repair and maintanence, vat credit not possible,

if they show the parts as capital goods purchase, then only VAT credit can be taken

Ramesha.M (Accountant) (800 Points)
Replied 15 September 2012

Dear sir,

A manufacturer using packing material for finished goods can we take input credit they are using packing material after fininshing of the goods so can we crdit the input vat

Regards

Ramesha.m

vikash (accounts) (21 Points)
Replied 13 October 2012

dear sir

i want to know that a manufacturer can sale its packing material or not. in case of excess packing material or which is not in use ...

Shubhabrata Banerjee (Accountant) (32 Points)
Replied 17 October 2012

I work in a Jewellery Co. In Jewellery Co. we purchase Jewellery box for packing purposes. It is not shown as sales in our cash memo. My question is, Is the VAT input [purchase of jewellery box] available against output VAT [sale of buisness goods, ornaments]?

1 Like

manasa (Student CA CPT ) (25 Points)
Replied 19 May 2015

DEAR SIR

Is purchase of consumables-local in a manufacturing industries eiligable for input credit under karnataka vat

can u pl tell me what all are eligable for input credit and time limit for avaling input credit

thank for your time

SURESH (Accountant) (32 Points)
Replied 28 November 2015

DEAR SIR SAREE TRADING FIRM USING PACKING MATERIALWITH VAT TAX INVOICE

THE FIRM CLAIMING FROM VAT CREDIT

THE PACKING MATERIAL USING FINISH SAREES TO PACK AND SELL IT

I CAN SHOW VAT CREDIT FOR PACKING MATERIAL PURCHASE ?

PLS. TELL US SOLUTION

SURESH (Accountant) (32 Points)
Replied 28 November 2015

Originally posted by : SURESH
	DEAR SIR SAREE TRADING FIRM USING PACKING MATERIALWITH VAT TAX INVOICE THE FIRM CLAIMING FROM VAT CREDIT THE PACKING MATERIAL USING FINISH SAREES TO PACK AND SELL IT I CAN SHOW VAT CREDIT FOR PACKING MATERIAL PURCHASE ? PLS. TELL US SOLUTION