IF A COMAPNY SITUATED IN ANDHRA PRADESH MAKING SALES UNDER WCT TO AN SEZ UNIT SITUATED IN ANDDHRA PRADESH. IN THIS CASE WHETHER WCT IS EXEMPT OR COMPANY LIABLE FOR WCT-VAT .
03 February 2010
SEZ Units are exempted from of payment of VAT on domestic procurements. SEZ unit should provide FORM H (can be collected from vat department.) for Intra - State sale while FORM I for interstate sale.
SEZ Units are also exempted from payment of WCT ( Service Tax ) for services consumed within the SEZ
My question is this, if A in SEZ unit in AP , a has given order for goods supply to B for their SEZ unit. B is also in AP.Now B has forawrded this order to C who is in WB. C has send goods to A directly and bill to it on B. In this case :
1. Can A can issue Form-I to C?
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2. Can this transaction be treated purchase against Form-C by B ?
07 February 2010
1. Yes , A can issue FORM - I to C as it is a sale between 2 states.
2. No , B is only forwarding the order to C. C has to clear goods against ARE - I as the material is for SEZ. So , in simple language the transaction is between A & C , while B is only faciliater, B can have Commission on the Deal. For SEZ B has no physical role in the sale, he is only Commission Agent.
The export benefit will also be enjoyed by C only .
08 February 2010
In above case , A will not get any benefit as A is purchasing from First Hand Dealer(B). SEZ unit can get benefit only when they purchase goods & services from the Manufacturer / actual service Provider .
However A can provide form I to B and B can provide Form C to C.
Its better that C supply directly to A and B should get Commission from either party . If C supplies Directly to A all parties A , B & C will be in profit in follwoing way.
1. A - will receive VAT FREE / EXCISE FREE MATERIAL
2. B - will get his cut.
3. C - can claim for duty drawback or DEPB as supplies to SEZ is Exports for C.
If Company “A†is SEZ unit. Company “B†and Company “C†is in Domestic Tariff Area.
Company “A†is given contract to Company “B†for supply of Goods for SEZ unit. Company “B†is forwarded this contract to company “Câ€. All three companies situated in Andhra Pradesh.
Following are the scenario of the transactions:
1. Company “C†supply goods directly to company “A†to its SEZ unit as per order given by company “Bâ€. 2. Company “C†supply goods to company “B†and company “B†will further these goods to company “Câ€
In both transactions what will be the applicability of VAT. Regards,
If Company A is SEZ unit. Company B and Company C is in Domestic Tariff Area.
Company A is given contract to Company B for supply of Goods for SEZ unit. Company B is forwarded this contract to company C. All three companies situated in Andhra Pradesh.
Following are the scenario of the transactions:
1. Company C supply goods directly to company A to its SEZ unit as per order given by company B. 2. Company C supply goods to company B and company B will further these goods to company C.
In both transactions what will be the applicability of VAT.
08 February 2010
Vat will not be applicable in either cases. But Excise is waived only when C supplies directly to A . C will also get export benefit in case of direct supply only.
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