TaxTMI 
TaxTMI 
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 ?
guar gum milling ITC on capital goods
19 Dec 2024 
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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. (AI Summary)
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. (AI Summary)