Wednesday, November 22, 2006

`Sales to SEZ units eligible for VAT refund'


Our Bureau

The cardinal principle behind VAT is tax paid on purchase is deductible
from tax payable on sales.

Chennai , Nov. 20

Sales of goods made to units in special economic zones would be eligible
for refund of Value Added Tax, Mr G. Shanmugam, Joint Commissioner
(Commercial Taxes) of VAT Cell,Government of Tamil Nadu, clarified on
Saturday.

In an interactive session on VAT organised here by the Rotary Club of
Esplanade, Mr Shanmugam said that when a unit in Tamil Nadu sells goods
in other States, the unit would be entitled to input tax credit of all
but 4 per cent of the input tax paid. For example, if a company buys a
product that had suffered a 12.5 per cent tax and sells it in Andhra
Pradesh, the company could claim an input tax credit of 8.5 per cent.
The State Government would retain 4 per cent tax, he said.

Eligibility

Same for inter-state stock transfers, provided they are done with the C
forms, the Joint Commissioner said

Answering a barrage of questions, Mr Shanmugam stressed that the
cardinal principle behind VAT was `tax paid on purchase is deductible
from tax payable on sales'.

http://www.thehindubusinessline.com/2006/11/21/stories/2006112100681900.htm

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