Commissioner of Commercial Taxes of Tamilnadu has recently issued a circular in which he addressed & clarified some issues on zero rate sale.
As per circular ,department has view that :-
(1) Zero rating is available to Units only in SEZ and Contractors or sub-contractors of SEZ developer is not eligible for zero rating;
(2) Sale of goods, involved in the execution of works contract, to any registered dealer located in SEZ in the State is also not zero-rate sale. department has view that such goods are not exported as such or consumed or used in the manufacture of other goods that are exported as required under Section 18(2) of the TNVAT Act, 2006.
Thus such works contract would be liable for Tax under TNVAT even done in SEZ area or for SEZ developer, and
(3) exemption to works contract or developer would be of specific exemption notification issued by TN GOVT on case to case basis only.
Resource: - Circular No 9/2013 dt 24.07.2013
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As per circular ,department has view that :-
(1) Zero rating is available to Units only in SEZ and Contractors or sub-contractors of SEZ developer is not eligible for zero rating;
(2) Sale of goods, involved in the execution of works contract, to any registered dealer located in SEZ in the State is also not zero-rate sale. department has view that such goods are not exported as such or consumed or used in the manufacture of other goods that are exported as required under Section 18(2) of the TNVAT Act, 2006.
Thus such works contract would be liable for Tax under TNVAT even done in SEZ area or for SEZ developer, and
(3) exemption to works contract or developer would be of specific exemption notification issued by TN GOVT on case to case basis only.
Resource: - Circular No 9/2013 dt 24.07.2013
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