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 andSUN]

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 andSUN]

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 Refunds on Export Inputs: Materials Not Eligible for H Form, Seek Refund Under Section 15(7) GVAT Act A user inquired about VAT refunds on raw materials used for exporting finished goods, specifically peanut butter ingredients and packaging materials. They asked if these could be purchased against H Form and about tax obligations. A respondent clarified that materials cannot be procured against H Form since they are inputs, not finished goods. Instead, VAT refunds can be sought from GVAT authorities. The user further asked about the refund process, DBK rates, and CENVAT credit. The respondent explained the refund procedure under Section 15(7) of the GVAT Act and noted that CENVAT credit affects DBK eligibility.