Packing material eligible as Input?

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DAYANANDA K N

ACCOUNTS EXCECUTIVE

541 Points Posted on 25 March 2011

Older definition of “Input” had specific mention of packing material “………goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production;(Rule 2 of cenvat credit rules)”

but under new definition there is no such specific mention and also it states Input excludes “goods having no relationship with the manufacture of a final product.”

Since packing material nothing do with the manufacturing or prodcution while it quality as input under New defination of input?

Replies (2)

Pankaj Arora

Learner

3431 Points Posted on 25 March 2011

Any service in relation to business is input service

Decisions in Coca Cola (Bombay High Court) and ABB (LB of CESTAT) have cleared most of doubts about interpretation of ‘input service’ and it is clear that any relation with manufacture or provision of taxable service is not required. any service in relation to business of manufacturer or service provider is ‘input service’

U S Sharma

glidor@gmail.com

21670 Points Posted on 26 March 2011

if final product needs packing to get marketed, then input credit available. u have to put the packing materials in production of final goods and only after packing the same should be entered in RG1 to avail the credit.