Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2008 (5) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (5) TMI 620 - HC - VAT and Sales TaxWhether furnace oil qualifies to be an "input" for the purpose of availing input tax credit? Held that:- What is required is that consumables should be directly used in the manufacturing process for production of finished product. The expressions "directly go into composition of finished product" and "directly used in manufacturing or processing of finished product" are not one and the same thing. There is a clear distinction. In the former, while the goods directly go into composition of finished product, in the latter, the consumable is directly used in the manufacturing process of finished products. It has already been held that furnace oil is consumable which is directly used in the manufacturing process for production of finished product. Certainly it does not directly go into composition of finished product. In spite of the same, since "input" as defined under section 2(25) of the OVAT Act includes consumables which are directly used in manufacturing of finished products, furnace oil is nothing but an "input" and tax paid on purchase of such input shall qualify for set off against the output tax. In that view of the matter furnace oil which is used in the process of manufacture of PSF is to be treated as an "input" as defined in section 2(25) of the OVAT Act and the input tax which has been paid on purchase of furnace oil can be claimed as input tax credit under section 2(27) of the OVAT Act against the tax payable on finished product, i.e., PSF. Accordingly, the impugned order dated June 28, 2006 (annexure 6) is quashed. W.P. allowed. In the result, the writ petition is allowed. There will be no order as to costs.
|