Free trade zone
This query is : Resolved
22 October 2013
Is VAT applicable on sales From FTZ (free trade zone) to domestic tariff area??
RAMESH KUMAR VERMA
(Expert)
22 October 2013
It was a persistent demand of the Trade and Industry to exempt the goods manufactured by EOUs and EHTP/STP/SEZ unit and cleared into DTA from payment of Special Additional Duty of Customs (SAD). The argument given in support was that clearance made by EOUs and STP/EHTP/ SEZ units in DTA suffer both SAD and local sale tax, whereas in case of imported goods, only SAD is payable.
(b) The matter has been considered and it has been decided to allow DTA clearance of goods manufactured by EOU and units in SEZ from payment of SAD subject to the condition that such goods are not exempt from payment of Sales Tax/ Value Added Tax ( VAT) levied by the State Governments. It may be noted that the said exemption is only available in respect of goods manufactured and produced in EOU/EHTP/ STP/SEZ units and brought to any other place in India and it will not be available to imported goods cleared without subjecting it to a process amounting to manufacture. The exemption has been allowed w.e.f. 1-4-2003 vide notification Nos. 26/2003-CE, dated 31-3-2003 & 23/2003-CE, dated 31-3-2003 ( Ref: Sl. No. 1 of the Table).
(b) The matter has been considered and it has been decided to allow DTA clearance of goods manufactured by EOU and units in SEZ from payment of SAD subject to the condition that such goods are not exempt from payment of Sales Tax/ Value Added Tax ( VAT) levied by the State Governments. It may be noted that the said exemption is only available in respect of goods manufactured and produced in EOU/EHTP/ STP/SEZ units and brought to any other place in India and it will not be available to imported goods cleared without subjecting it to a process amounting to manufacture. The exemption has been allowed w.e.f. 1-4-2003 vide notification Nos. 26/2003-CE, dated 31-3-2003 & 23/2003-CE, dated 31-3-2003 ( Ref: Sl. No. 1 of the Table).
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