VAT refund on raw materials for Exportation of Finished Goods

[Kishan Barai]

As we are buying peanuts (5 % Vat), sugar (5% Vat), cap and Jar (17.5% Excise); and exporting the finished product.

Can we buy all (ingredients of peanut butter and packaging material) against H Form? Do we require to pay any taxes to our government here for ingredients and packing material?

Kindly clarify on above. Thank you

[YAGAY and SUN]

You cannot procure material against form H under CST Act as these are inputs and packaging material not the finished goods. On exportation of finished goods you may seek refund on inputs used in manufacturing of finished goods from GVAT Authorities.

[Kishan Barai]

Thank You for you reply.

Mfg unit is established in Gujarat, what is the legal procedure to get refund of Tax Paid ? Any documents like H Form ??

Can we ask for higher rate of DBK via fixation of Brand Rate ??

Any CENVAT Credit facility can we have ??

[YAGAY and SUN]

Refer Section 15(7) of the GVAT Act: In case of sales made in the course of export outside the territory of India and the amount of carried forward tax credit admissible under items (iv) and (v) of clause (a) of sub-section (3) of section 11 remains unadjusted, such amount of tax credit shall be refunded within the period of three months next following the end of the month in which such purchases were made.

Duty Drawback: You may seek AIR DBK or alternatively go for either Brand or Special Brand rate fixation. If CENVAT credit is availed then no DBK to the extent of availed CENVAT credit would be allowed.

AI Summary

VAT refund on inputs available for exported finished goods, with duty drawback options and CENVAT credit interaction.
Inputs and packaging for manufactured exports cannot be purchased against H Form; VAT paid on inputs used in exported finished goods is refundable as unadjusted carried-forward input tax credit under GVAT, and manufacturers should apply to the state VAT authority for refund. Exporters may claim All Industry Drawback or seek Brand/Special Brand rate fixation, but duty drawback is reduced to the extent CENVAT credit has been availed.