15 October 2011
sir our company is automobile company we purchase material from within state agst Form C and outside the state which is use in manufacturing process.before final product we do some process as (1) wire cutting (2)Pipe Grinding (3)Pipe Bending (4) Welding (5) Chipping (6) Gauging (7) Buffing my query is that which material we use in processing of manufacturing it will be come in purchase account or Direct Expenses. further that we show processing Material is Vat Return. sir kindly suggest me that take processing material in process account or direct expenses
16 October 2011
Mr Dinesh Kumar, Purchases of consumables such as grinding wheel,drills,coolants,lubricants,cotton waste etc,which do not go into the product,are treated as direct expenses.Purchases of goods that go into or added,or used in a chemical orr other process can be taken as raw materials.VAT paid on their purchases can be claimed as input credit.VAT paid on consumables can not be claimed as input tax. MJK
17 October 2011
as per Uttarakhand VAT Purchase Eligible for Credit Section 6(3) input tax credit shall be allowed for the pupose of use as raw material and consumables in manufacturing or processing of goods and containers or other packing material so our consumable items is not raw material but it is used in manufacturing process and it is used for final production.
17 October 2011
Mr.Dinesh kumar, At the moment I do not have a copy of Uttaranchal VAT Act.I have given my opinion on the basis of the general practice of treating purchases of consumables andraw materials.If it is expressly provided in that VAT Act you may avail the benifit.
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