Refund CST - of SEZ Transaction, Customs - Exim - SEZ

[Vinayak More]

Dear Sir,

Greetings……………….

As discussed, Kindly guide us on below matter of CST Tax on ear Box which we normally assembled in our Nacelle ( Turbine ) and finally exported to Australia.

As our status of Senvion India Ltd not registered in Karnataka and situated in Suzlon SEZ at Padubidri near to Udupi. Our Parent company located in Germany ( SENVION SE ) and they have placed direct Purchase Order to ZF Wind Power Coimbatore Ltd for the supply of Gear Box which amounting ₹ 1.15 Cr per Gear Box.

As per Project wise ZF wind Power supply Gear Box to Senvion India at our Padubidri plant near to Udupi by charging CST on it .

ZF wind Power Coimbatore getting their payment in foreign exchange and that itself proves this is been Export outside India.

The concern of PO directly from Parent company ( SENVION SE ) and that reason we are not getting exemption of I form as waiver in CST. We are exporting final product as Nacelle and Hub to outside India and We could able to support details Export Document of BL , Mate Receipt and Invoice and Packing list.

I have tried all sources to make it exempt but considering our status at Padu Plant, Not availability of I form and PO from Germany not achievable. We have paid ₹ 560000/- per Gear Box as CST and We could at least try to save CST in upcoming project for India. The below table shows the how much we have paid as CST in financial year 2013-14 and 2014-15.

We have paid below amount in CST as mentioned below financial year.

No.of gear Box Procured	Year	CST per Gear Box ( Rs)	Total CST Paid ( Rs.)
58	2013-14	560,000.00	32,480,000.00
34	2014-15	560,000.00	19,040,000.00

As per latest Budget the Govt has appointed High Level committee to see such type of complicated transaction.

The New Govt has announced in Budget the high level committee ( over CBDT ) to look out such complicated transaction of tax related, Through this we could reimburse at least 2014-15 CST charged by ZF Wind Power on us. The Speech of Finance Minister narrated below.

Mr. Arun Jaitley - Finance Minister Speech - While the FM has said that the present Government is against making any retrospective amendments, he has not removed the retrospective amendments made in 2012 to the Income Tax Act. The FM did mention that the Government would set up a high powered committee (HPC) which would scrutinize all indirect transfers made in past and advise the tax department accordingly. What is not clear is what would this HPC be required to do, especially when the Act clearly requires indirect transfers to be subject to tax in India. It could just be that the HPC would be given the mandate to scrutinize each transaction to ascertain if the arrangement had substance or was it entered into to avoid India capital gains tax liability. Where HPC is satisfied about the substance (as the Supreme Court accepted in Vodafone), they may recommend dropping the proceedings against the taxpayer. Where however the HPC is of view that substance is lacking, they may advise the department to proceed against the taxpayer. One would need to read the fine print to understand what exactly would the mandate of HPC be and how it would work.

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[MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above said issue? If you got clarifications please share the same.