Applicability of VAT/CST on sale of goods from FTWZ to DTA

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....pplicability of VAT/CST on sale of goods from FTWZ to DTA<br> Query (Issue) Started By: - Robert Kunnel Dated:- 9-1-2015 Last Reply Date:- 17-2-2016 Customs - Exim - SEZ<br>Got 2 Replies<br>Customs<br>Applicability of VAT/CST on sale of goods from FTWZ to DTA:- Goods sold from FTWZ to DTA are taxed to full import duties at the time of removal to DTA which is done on the basis of Bill of Entry for....

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.... Home Consumption. Since such goods are sold prior to clearance into DTA, they qualify as 'SALE IN COURSE OF IMPORT' as per CST Act (Year). However, commercial tax offices of several states are taking a stand that these sale transactions are liable for payment of VAT/CST thus engaging in double taxation and also placing FTWZ at an unfair tax disadvantage making it difficult for FTWZ Units like us....

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.... to generate business and develop service exports from FTWZ. Notfn. 045/2005 grants exemption from additional duty of customs for all goods cleared from SEZ / FTWZ provided that such goods are not exempt from State Taxes (VAT/CST) when sold in DTA. The spirit of the notfn is to grant exemption from SAD to goods which are cleared from SEZ on payment of duties and meant for subsequent sale in DTA o....

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....n payment of VAT/CST, in order to avoid double taxation (SAD and VAT/CST) on the same goods. The same benefit is available in the form of refund of SAD when imported goods are cleared from the Ports and sold on payment of VAT/CST in the local market. The above needs to be clarified in clear instructions so that the implementation is proper and the benefit available to clients using FTWZ services ....

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....as this benefit is a key factor in convincing clients to utilize the FTWZ which is typically located far from the port and hence involves additional logistics cost. Reply By Robert Kunnel: The Reply: Can I expect a reply to this please. Reply By Srinivasan Muthukannan: The Reply: Dear Sir, Can i expect a reply to this please. Still we are struggling on the same. Please revert back on priori....

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....ty. Regards S. Muthukannan<br> Discussion Forum - Knowledge Sharing ....