Tax applicable in packing

[Guest]

If we are branding a product then the input tax of purchasing a packing material will get deducted in VAT returns or it will be a company expense.

[Ganeshan Kalyani]

Input tax credit is eligible provided output is taxable.

AI Summary

Input tax credit: packaging material purchases are claimable when the related outputs are taxable. Whether input tax paid on packaging materials used in branding is deductible in VAT returns or must be treated as a company expense: the input tax is claimable where the related outputs are subject to VAT. The operative rule is that input tax credit on packing material purchases can be set off against output tax liability only if the supplies resulting from those inputs are taxable.