2018 (6) TMI 173 - AAR - VAT and Sales Tax

Clarification for the rate of tax - Ready Mix Concrete - supply to SEZ - TNVAT Act - Held that - It is clarified that Supply of Ready Mix Concrete to SEZ is exempted from tax as per the terms and conditions laid down in G.O. Ms.No.193 dated 30.12.2006.

Summary

Issues:
Clarification on the rate of tax for "Ready Mix Concrete for supply to SEZ" and eligibility for Input Tax Credit for raw materials purchased.

Analysis:
The case involved an application by a registered dealer seeking clarification under Section 48-A (1) of the Tamil Nadu Value Added Tax Act, 2006, regarding the rate of tax on supplying "Ready Mix Concrete to SEZ, M/s. Estancia IT Park Pvt. Limited" and the eligibility for Input Tax Credit for raw materials used in producing the concrete.

Upon detailed examination of the TNVAT Act, 2006, and TNVAT Rules, 2007, along with related entries in all Schedules to the TNVAT Act, 2006, it was found that Section 18(1)(ii) of the TNVAT Act 2006, read with relevant notifications, provides an exemption from sales tax for goods sold to a registered dealer for specific purposes in Special Economic Zones (SEZs). The exemption is subject to conditions, including obtaining and furnishing a certificate declaring the specific use of purchased goods.

Referring to previous clarifications, it was highlighted that the sale of goods for works contracts in SEZ units is exempt from tax under the terms specified in the relevant government notification.

Consequently, the Authority for Advance Ruling clarified that the supply of Ready Mix Concrete to SEZ is exempt from tax based on the conditions outlined in the relevant government notification, specifically G.O. Ms.No.193 dated 30.12.2006.

In conclusion, the judgment provided a clear interpretation of the tax exemption provisions under the TNVAT Act, 2006, for supplies to SEZs, ensuring compliance with the specified conditions for eligibility for tax exemption and Input Tax Credit.