Vat applicability on 3rd party manufacturing

[GOPI AGARWAL]

We are having manufacturing activity on behalf of Principal Manufactured goods are handed over to the Principal Manufacturer at the manufacturing site only.

We are receiving conversion charges which having Fixed Cost towards Rent-Labour charges etc and Variable cost i.e Electricity , DG power, LPG and Repair Maint and Consumable etc.

We are also sourcing Spares and Consumable interstate also against Form-C.

We need guidance on the below points:-

1. What is the implication of Tax Liability on Interstate purchase.

2. Whether Input against spares, LPG can be adjusted with Un- Registered purchase

Thanks

Gopi Agarwal

AI Summary

Third-party manufacturer seeks guidance on VAT applicability for conversion charges and interstate purchases under Form-C. A third-party manufacturer is seeking guidance on VAT applicability for their operations conducted on behalf of a principal manufacturer. The goods are handed over at the manufacturing site, and the manufacturer receives conversion charges comprising fixed costs (rent and labor) and variable costs (electricity, power, LPG, repairs, and consumables). They also source spares and consumables interstate using Form-C. The queries focus on the tax liability implications of interstate purchases and whether inputs for spares and LPG can be adjusted against unregistered purchases.