VAT Refund

[Guest]

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

[Rama Krishana]

There is a benefit of refund (reimbursement) of central sales tax - (CST) on purchases from Domestic Tariff Area as per Foreign Trade Policy (FTP) but the state levied are governed by the individual states and therefore you need to check individual state policy. 

AI Summary

VAT refund eligibility for EOUs may depend on central CST reimbursement under FTP and state VAT policy. Whether an export oriented unit can obtain a refund for tax paid on capital goods, spares and vehicles turns on two regimes: reimbursement of central sales tax under the Foreign Trade Policy for purchases from the Domestic Tariff Area, and state level VAT/sales tax rules which are governed by individual state policies and must be examined to determine eligibility for refund.