VAT rules_Hiring of Reusable package

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sri

Software

83 Points Posted on 30 May 2008

Company is involved in the selling of 'reusable packages'. These packages get
manufactured from this company's vendors. Then, these packages will be hired to the company's customers on Daily Hire Charges.

These will be treated as ASSETS and depreciation will be calculated in this company.

My doubts are as below:
1) The VAT rules which are applicable for if we treat them as Capital Goods.

2) Can I treat them as just inputs instead of capital goods (Using concept of Consistency)?

3) Applicability of CST in the case of inter-state sales (I think, No VAT is applicable in this scenario.

If you need any further information, pls let me know.

Thanks for your inputs/time.
Sridevi

Replies (2)

biren thakkar

accounts manager

231 Points Posted on 03 June 2008

Dear Sri,

Can you clarify me what this resubable packages are for , i mean for what purpose it has hired or what type of material has been used.

sri

Software

83 Points Posted on 05 June 2008

I was out the of town. Sorry for not responding earlier.

BTW, This is used for storing the products. These are called Plastic Crates and Pallets. This is usually called equipment pooling system.

In general, we see plastic almariahs (etc) in Super Markets to display the products. The products automatically loaded into thse pallets/crates and then displayed.

Once the goods are sold out, these crates/pallets will be returned back to this company. This company delivers these Crates/Pallets to the door step of the customers and again its takes (once its been used) from the door step of the customer. It charges daily hire fees.

Hope I m clear.

regards

Sri