VAT input on repairs for a manufacturing concern

[praveen m r]

This query is relating to the Karnataka VAT. A manufacturing concern is getting its machines repaired. The person who repaired the machines had to change certain material and he charged VAT for the same. Whether the same is claimable?

I saw the section which defines goods - it does mention repairs.

and input can be taken on goods.

So does my claim on saying input can be claimed on goods tenable?

[S G]

Dear Mr. Praveen

Subject to the other conditions like invoice should be tax invoice etc. to avail input tax, the company can claim the input tax on goods required to repair the machinery. Since the machinery shall be used to manufacture the taxable goods.

'Input' means any goods including capital goods purchased by a dealer in the course of his business for re-sale or for use in the manufacture or processing or packaging or storing of other goods or for any other use in business.

'Input Tax' in relation to a registered dealer means the tax collected or payable under KVAT on the sale to him of any goods for use in the course of his business and includes..........

'Tax Credit' is the amount of input tax for which dealer is allowed to claim a credit. It is also referred to as 'Input Tax Credit'.

From the above defined terms it is relevant to note that tax credit shall be allowed on any goods which shall use for use in manufacture. As the goods are used to bring the machinery in workable condition for use in manufacture process. The said goods are being use for manufacture directly or directly. Hence, input tax credit shall be allowed on it.

Thanks!!

AI Summary

Input tax credit on VAT for repair materials can be claimed when used in manufacturing, subject to invoice and statutory conditions. VAT paid on goods used in the repair of manufacturing machinery qualifies as input tax under Karnataka VAT when the goods are purchased in the course of business for use in manufacture; such tax credit can be claimed provided the dealer meets statutory conditions, including possession of a proper tax invoice and other requirements for availing input tax.