Industrial input certificate rules support 4% tax treatment for goods used in manufacture.

Industrial inputs supported by a Rule 6(3)(b) certificate containing the purchaser's details, invoice particulars, goods description and declaration of manufacture use were held eligible for assessment at 4%. The assessing authority could not disregard a certificate that satisfied the statutory requirements, because the scheme recognises the purchaser-manufacturer's declaration as the basis for concessional treatment. Goods used as inputs in manufacture therefore fell within Entry 67 of Part B of the First Schedule at 4%, and any defect in the certificate would, if at all, lie against the issuer rather than the selling dealer.

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Issues: Whether the goods supplied by the assessee were industrial inputs eligible for assessment at 4% on the strength of the industrial input certificate under Rule 6(3)(b) of the Tamil Nadu Value Added Tax Rules, 2007, and whether the assessing authority could disregard the certificate and tax the turnover at 12.5%.

Analysis: The assessee produced industrial input certificates containing the purchaser's details, invoice particulars, description of goods and the declaration that the goods were industrial inputs used in manufacture. Rule 6(3)(b) requires the purchasing manufacturer to issue such a certificate to the seller, and the certificate filed on record satisfied the statutory particulars. The assessment authority's view that the certificate had no value was inconsistent with the statutory scheme. The goods were used as inputs in the manufacture of taxable goods and therefore fell under Entry 67 of Part B of the First Schedule, which prescribes tax at 4%. Even if there was any defect in the certificate, the consequence would lie with the issuer and not the selling dealer.

Conclusion: The goods were correctly assessable at 4% as industrial inputs, and the assessee succeeded on the rate of tax issue.

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