TaxTMI 
TaxTMI 
Valuation- abatement in respect of set off on Sales Tax - reg.
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.... deducted from the sale price of a commodity to arrive at the assessable value would be the net sales tax i.e. after deducting the set-off admissible. The manner of calculation was also illustrated in the Circular through an example. 2. The practice in the field prior to the issue of the Circular dt.1.7.2002 was that the sales tax actually billed/payable as per the invoice was allowed as deductio....
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....x also. 3. While framing the new section 4 effective from 1.7.2000, and introducing the concept of 'transaction value', the above Explanation was deleted, primarily on the consideration that it had become redundant since no central excise set-off notifications existed any longer in the Central Excise Tariff. In view of the deletion of this Explanation the Circular of 1994 issued on the basis of A....
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..../rebate admissible, either in full or in part, on the sales tax/purchase tax paid on the raw materials during the said month/quarter. The sales tax set-off in such cases, therefore, does not work like the central excise set-off notifications where one-to-one relationship is to be established between the finished product and the raw materials and the assessee is allowed to charge only the net centr....
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....se duty. Thus, it is seen that the set-off scheme in respect of sales tax operates in these cases somewhat like the CENVAT scheme which does not have the effect of changing the rate of duty payable on the finished product. 6. Therefore, since the set-off scheme of sales tax does not change the rate of sales tax payable/chargeable on the finished goods, the set-off is not to be taken into account ....