VAT Refund

[CHITRA RAGURAM]

Whether an EOU is eligible for refund of VAT paid on purchase of capital goods, spares, vehicles and its spares.

AI Summary

EOU's VAT Refund Eligibility for Capital Goods Depends on State Policy, Despite CST Reimbursement Under Foreign Trade Policy. An entity inquired about the eligibility of an Export Oriented Unit (EOU) for a VAT refund on purchases of capital goods, spares, vehicles, and their spares. The response clarified that while there is a provision for the reimbursement of Central Sales Tax (CST) on purchases from the Domestic Tariff Area under the Foreign Trade Policy, VAT refunds are subject to the policies of individual states. Thus, the entity must verify the specific state policy for VAT refunds.