ITC ON CONSUMABLE NOT FORMING PART OF FINAL PRODUCT

[ajay chharia]

MY CLIENT IS A MNUFACTURER AND SELLER OF LARGEFORMAT PRINTERS. He consume inks internally for the purpose of TESTING OF PRINTERS, providing Demo to the customers in house or during exhibitions .WHETHER ITC WILL BE ALLOWED ON PURCHASE OF INK

[Ganeshan Kalyani]

Yes, ITC is eligible.

[KASTURI SETHI]

YES. The criteria is that ITC should be used in the course of business or furtherance of business as per Section 16(1) of CGST Act. One-to-one correlation is not required---AAAR Gujarat in Ref. 2022 (1) TMI 1056 - APPELLATE AUTHORITY FOR ADVANCE RULING, GUJARAT - Aristo Bullion P Ltd.

[Padmanathan KV]

Agreed with experts. ITC is allowed in this scenario. Is there any specific reason why you think it may be disallowed?

[GUNASEKARAN K]

ITC can be taken on Inputs used for demo purpose.

[Finacus Technologies]

You are true, thank you so much for sharing, I learnt so much.

AI Summary

Input tax credit allowed for consumables used in testing and demonstrations when used in the course of business under CGST entitlement. ITC is available on inks and consumables used for internal testing and demonstrations where such use is in the course of or furtherance of business; one-to-one correlation with the final product is not required and eligibility depends on meeting the CGST Act conditions for input tax credit entitlement.