VAT Rate for Tin Containers

[A Rahim]

One of my assessee seels tin containers, like Tooth Powder tin container, and charges 4% VAT.

During the assessment, the Assessing Officer insisists that VAT on tin containers should be 12.5%.

This tin conatiner is used as packing material for powdered toothpaste.

 

I would be grateful if the experts tell me the notifications/circulars or schedules and the correct applicable VAT rate for this item.

This is urgent.

 

Regards

Rahim 

[A Rahim]

I have gone through the rules and found the rate of VAT applicable at 4%.

AI Summary

VAT on packing materials: tin containers for powdered toothpaste qualify for the reduced VAT rate under applicable rules. The assessing officer challenged the VAT rate applied to tin containers used as packing for powdered toothpaste, asserting a higher rate, but a review of the rules led to the conclusion that the lower VAT rate charged by the seller is correct; no specific statutory references were cited in the reply.