Exemption on VAT/CST for goods manufactured for Export

[Samir Banerjee]

If a manufacture procure raw material, capital goods that are used to manufacture of goods for export. Is there any provision that (a) manufacturer of such goods could procure raw material & capital goods with upfront VAT & CST exemption (b) if manufacture needs to pay VAT & CST, can he claim refund of the same. Please let me know provision for both situation with procedure to avail the full exemption

[YAGAY and SUN]

Dear Sameer,

Yes, there are provisions in State specific VAT Laws either to procure the inputs/material etc. without payment of VAT on producing prescribed Forms or avail the refund at the time of finalization of Audits/Assessments. But tax paid under the provisions of CST Act, 1956 would gonna be a cost to you though concession rate 2% against C form is available.

Regards,

YAGAY and SUN

(Management, Business & Indirect Tax Consultants)

 

[DR.MARIAPPAN GOVINDARAJAN]

Yes the viewsof Yagay and Sun is correct.

AI Summary

VAT exemption on inputs allows procurement without tax or refund claim; CST payments generally remain a cost with limited concession.
State VAT laws commonly allow manufacturers to procure inputs and capital goods for export production without upfront VAT by submitting prescribed forms or to claim VAT refunds following audits/assessments; CST paid on inter state purchases generally remains a cost, albeit with a limited concession available on submission of the prescribed C form.