ITC on repair / maint and consumable goods

[Guest]

Dear Expert,

i have some ambiguity in vat ITC on repair / maint and consumable goods. Can we take input on these or not ?

Kindly suggest...

Regard

Vikram

[YAGAY andSUN]

Dear Vikram,

Under HPVAT Laws, to some extent on consumables you can avail the ITC depending on the nature of goods and their usage.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

[S G]

Dear Mr. Vikram

Subject to the other conditions like invoice should be tax invoice etc. to avail input tax, the company can claim the input tax on on repair /maintenance and consumable 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 paid or payable under Himachal VAT Act, by purchasing registered dealer to selling registered dealer on the purchase of any goods for use in the course of business for re-sale or for use in the manufacture of taxable goods...............

'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 be for the purpose of re-sale or for use in manufacture. For example, repair of machinery is normal in manufacturing concern to bring the machinery in workable condition. The goods used for repairing the machinery shall be eligible as input tax credit as it will be deemed that the same will be used for manufacture the taxable goods directly or indirectly.

Hope it will help you!!

Thanks

Sumit Aggarwal

AI Summary

Input tax credit eligibility on repair and maintenance hinges on business use and compliance with invoice and other conditions. Input tax credit is available on goods purchased for use in the course of business where statutory definitions treat repair parts and maintenance supplies as inputs. Subject to formal conditions such as a tax invoice and other eligibility requirements, goods used to restore machinery to working condition are deemed used in manufacture and attract tax credit. Consumable goods qualify only insofar as their nature and actual business usage demonstrate they are used in the course of business.