Uttar Pradesh Industrial Scheme: VAT Subsidy as Capital Receipt, Not Taxable, Encourages New Industry Establishment.

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....VAT subsidy - Characterization of receipts - taxability of receipts - The refund now VAT as given to the industrial undertakings only for the purpose of fulfilling the best industrialization of the State by establishment of new industries. Thus, incentive provided under the Uttar Pradesh Industrial Scheme is nothing, but capital subsidy not liable to be taxed - The VAT subsidy is a capital receipt and hence not liable for tax and it cannot be treated as revenue receipt liable for tax. - AT....