guar gum milling ITC on capital goods

[BAJRANG DAIYA]

one manufacturar of guar gum industry purchase plant and machinery for his mill. his main product like guar gum split is taxble @ 5% under gst act and his by product like korma and churi is exempt from tax. now the ITC Claim on plant and machinery whole are requed to reversal proportionate basis or he can claim whole ITC on capital goods used. can he also claim ITC on packing material like bardana for taxable supplies ?

[Sadanand Bulbule]

Refer Section 18 of the GST Act.

[KASTURI SETHI]

Bye-product is also a finished product. Treat it at par with guar gum. Packing material is to be treated as input.

[KASTURI SETHI]

Regarding ITC on packing material see para no.9 of the decision of AAR :-

2018 (7) TMI 881 - AUTHORITY FOR ADVANCE RULINGS, CHHATTISGARH - IN RE : VNR SEEDS PVT. LTD.

 

[Sadanand Bulbule]

Plz read it Section 17. 

[Shilpi Jain]

Packing material for taxable products - can claim ITC .

P&M proportionate reversal required - considering the facts provided.

Though suggested to consult an expert to see if there is any way out.

AI Summary

Input tax credit on capital goods requires proportionate reversal when used for taxable and exempt supplies; packing material ITC claimable.
Capital goods used to produce both taxable and exempt outputs require a proportionate reversal of input tax credit under Sections 17 and 18; packing material used for taxable products is treated as an input and ITC on such packing material is claimable, with AAR precedent cited and by-products potentially treated at par with the main finished product for input classification.