SEZ INTERSTATE PURCHASE

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JAGAN NATH RAO (Querist)
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28 February 2011 During the construction of SEZ, the interstate purchase of Building material & other material except plant & machinery and equipment is exempt from CST against Form 'I' ?

JIGAR DALAL

JIGAR DALAL (Expert)
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01 March 2011 Inter-state sale of goods to a unit located in SEZ is exempt from payment of central sales tax, subject to the purchasing unit issuing a statutory declaration in ‘Form-I’.

Sale of goods to a unit located within the same state is governed by the VAT legislation of the relevant state. In most states, sales of goods to SEZ units are not exempt from VAT. Instead, such sales have been classified as ‘zero-rated’ sales. This implies that sales to SEZ are chargeable to VAT at 0%, and the seller is eligible to avail input tax credit, subject to other prescribed conditions.