Exemptions under MVAT Act

18-Jan-2012

Exemptions of Sales to State Government and Central Government etc under MVAT act

  1. As per section 8(5) of MVAT Act 2002 the State Government may by general or special order and under certain conditions and restrictions may be specified or partly from payment of taxes any sales or classes of sale of goods to State Government, Central Government, MSEB, BSNL and such other organization.
  2. Accordingly, the Finance department issued a order and a notification no. VAT-1505/192/Taxation-1 dated 28/07/2006 and restricted the tax rate to 4% for making the sale by any of the organizations mentioned in the notifications.
  3. Subsequently, by notification no. VAT-1505/CR-192/Taxation-1 dated 19/04/2007. The State Government and Central Government were excluded from the parties as mentioned in the earlier notifications. In other words on and from 1st May 2007 the benefit of section 8(5) read with various notifications thereafter of exemption from taxation or concessional rate of taxation was withdrawn for the State Government and Central Government.
  4. Subsequently, as per notification no. VAT 1511/CR-54(6)/Taxation-1 dated 27/04/2011 the concessional rate of tax of 4% according to earlier notifications was substituted by 5%. The said concessional rate of 5% was made applicable form 1st May 2011.
  5. There are certain other notifications which are also may please be considered in the context of above subject matter some of them are as follows-
    1. Notification No. VAT -1505/CR-192/Taxation-1 (Corrigendum) dated 3rd Aug 2006.
    2. Notification no. VAT-1507/CR-93/Taxation-1 dated 21st Jan 2008.
    3. Notification no VAT -1509/CR-130/Taxation-1 dated 31st Aug 2009.
    4. Trade Circular No.48 T of 2007 dated 25/06/2007.
    5. Notification no. VAT-1506/CR-134/Taxation-1 dated 2006.
    6. Such other related notifications from time to time.
  6. Accordingly, it is advisable to look into the related provisions and notifications at the time of taxation to MVAT to the related parties.

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