Pearl Beverages Ltd. Vs State of Andhra Pradesh (Andhra Pradesh High Court)
Andhra Pradesh High Court held that manufacturer of soft drinks are eligible for Input Tax Credit (ITC) on purchase of refrigerators, coolers and deep freezers in terms of rule 20(2) of the AP VAT Rules, 2005. Accordingly, tax revision case partly allowed.
Facts- The revision petitioner herein is manufacturer of soft drinks under the brand name of Pepsi. In furtherance of such business, the appellant regularly purchases glass bottles and coolers. In view of transitional provision facilitating the change from one statutory regime to another and under transition from the AP General Sales Tax Act, 1957, to the Value Added Tax system u/s. 13(2) of VAT Act, the petitioner herein made a claim to Input Tax Credit equivalent to the APGST paid on the value of the opening stock as on 01.04.2005 relating to the purchases of the Glass bottles, Coolers, stores and spares during the year 2004-05.
The request of the petitioner, i.e., M/s. Pearl Beverages Limited for the tax paid under APGST for a claim of relief of Rs.12,65,333/- on purchase of coolers and amount of Rs.1,98,224/- on Stores, spares, and Rs.9,75,085/- on glass bottles is disallowed on the ground that the coolers are not for resale purpose and the claim of glass bottles purchased for Rs.2,43,77,122/- is verified and noticed that during this year, the breakages are estimated to be Rs.1 crore, hence, the claim of Rs.4,00,000/- is disallowed and the other claim of Rs.1,98,224/- being taxes paid on stores, spares, etc., is also disallowed, as there is no provision in the Act, vide proceedings dated 06.09.2025 by the Assistant Commissioner, Large Tax Payer Unit, Guntur Division. The Commercial Tax Officer, Large Taxpayer Unit Circle, Guntur Division, has rejected the claim, vide proceedings dated 27.10.2005
