Have you ever paid tax on a product? Yes. Everything is comes with tax. Paying tax is the duty of every citizen. One must follow it as per provisions laid down under law. But are all the commodities purchased taxable? In this blog we are going to discuss tax being charged with reference to Vending machines. Question is, are Vending Machine Sales Taxable?

Tax on vending machines

Vending machines come under the Harmonized System of Nomenclature code. This code is used by manufactures, importers and exporters. This is a 6-digit code that classifies different products. One such product is Automatic goods vending-machines. These machines are taxable at a rate of 28%. This is a revised rate after 2017, determined in the meeting of the GST council. It is mandatory for vending machine operators to register themselves under goods and service tax before engaging in the business. 

Sales made through Vending machines taxable?

Yes, unlike other businesses, sales made through vending machines are taxable. In India, tax is payable in the form of Goods and Service Tax (also known as GST). The GST on vending machines is set to 28% by the Government of India. Any purchase of a vending machine made by the manufacturer would cost additional 28% GST. For instance, Mr. A purchases a vending machine from a manufacturer @Rs 200,000/-. He would also have to pay an additional cost in the form of tax @28%. The final price of vending machine he will have to pay is Rs. 256,000/-

Additionally, the sales made from vending machines also are taxable. It depends whether the products present in a vending machine are taxable or not. The tax on the products purchased by vendors is purchase tax. It is payable at the time of purchase. Once the products are stored in vending machines, it is the consumer who pays tax on it. Finally, when the overall sales of those products take place, the vendor has to pay a sales tax levied on those products collectively. For example: Mr. A buys maggie from a machine that only vends maggie. Mr. A has to pay the MRP that already includes tax. The vendor however, after the overall sales take place has to pay sales tax on the total sales made through that maggie vending machine at the end of financial year.

Taxable and non-taxable products in Vending machine 

Taxable Sales

Most states charge tax on trading transactions. These transactions are subject to ‘taxable sales”. Taxable Sales via vending machines made on certain products include products like food and drinks, certain grooming and hygiene products like, baby lotions, antiperspirants, shampoo, soaps, toothbrush, condoms, etc., and other miscellaneous items like books, magazines, pencils, etc. Vendors require to pay tax from the sales made through selling of such commodities. 

Non-taxable sales

Not all items that a vending machine contains are taxable. Products such as cigarettes are taxable at retail level itself are not after. Other products including newspapers, laundry, utility machines like weighing machines are non-taxable. 

Like mentioned above, every commodity is comes with tax. However, certain commodities are not.

Conclusion

Every commodity is includes tax with certain exemptions. Products in vending machines differ. There are taxable as well as non-taxable commodities. Paying tax is the duty that comes along. Once the operations of business takes place, it becomes compulsory to pay tax on vending machines.