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ITC on Gunny Bags Purchase

05 June 2018

Hi all,
We are selling 0% and taxable goods every month. we purchased gunny bags- 5% goods for our business purpose and we not sell the gunny bags. Can we avial ITC on Gunny bags Purchases?

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10 Replies

CA Padmasri Manyam (CA in Practice) (1340 Points)
Replied 05 June 2018

What purpose you are using those gunny bags?

vinay joshi (83 Points)
Replied 05 June 2018

Actually we have rice mill and we using gunny bags- For packing purpose. packing of rice (rice bags)

Vinod Babu (24191 Points)
Replied 05 June 2018

You can avail ITC of your purchase while you resale the gunny bags. Or used for packing purpose in your business if you recieve invoice in B2B with company name and Gstin in it.

If you are selling this, follow the gst rate and hsn code.

GST of HS Code 630510 - Of Jute Or Of Other Textile Bastfibres Of Heading 5303:.

Goods and Services Tax (GST) of HS Code 63051030

Descripttion :-Jute Hessian Bags 5%

if Other made up textile articles, sets, worn clothing and worn textile articles and rags, of sale value exceeding Rs. 1000 per piece, Then 12% GST is Applicable

2 Like

vinay joshi (83 Points)
Replied 05 June 2018

Thank You Vinod Babu Sir.

Pankaj Rawat (GST Practitioner) (55030 Points)
Replied 05 June 2018

No you cannot take ITC for the same.

Let's assume You R providing these bags to customer free of cost ,.. then you have to Reverse the ITC u/s 17(5)

And

If you are charging on bill (bags) , you should charge GST on same & in this condition you can take the ITC for the same

1 Like

vinay joshi (83 Points)
Replied 05 June 2018

Thank You @ Pankaj Sit

RAJA P M ("Do the Right Thing...!!!") (127053 Points)
Replied 05 June 2018

Yes... I agreed to Mr Pankaj Rawat view...

ITC not available for above said query...
Your nature of Supply is exempted and You can't supply gunny bags. It's used in your principle supply as exempted...
So,
We supply exempted goods then ITC not available.

Vinod Babu (24191 Points)
Replied 05 June 2018

Yes. Agreed views of Raja sir and Pankaj sir.

As the goods dealing are exempted, no itc can be claimed.
But if they have any taxable supplies then surely itc can be taken.

1 Like

rajni sharma (none) (444 Points)
Replied 24 July 2020

Dear Raja Sir,

Hello Sir, How are you? Hope you doing great!

Sir, as i am manufacturer of "Poly Propylene Leno Bags or Gunny Bags", i sell these bags to Rice Mill .They used bag for packing rice.Sir, actually m confused why Rice Mill cant take ITC on purchase of these bags?In exempted goods list i did not find such name.

Please solve my confusion!

Thanks & Regards,

Rajni

RAJA P M ("Do the Right Thing...!!!") (127053 Points)
Replied 26 July 2020

Hello Ms Rajini Sharma.,

I'm fine.
How are You...?
How is going there...?

No... Gunny bag is taxable. But, The querist's principal (main) supply is exempted. So, The ITC can't be taken if supplied are exempted. the said ITC is reversible as per GST act...