Local body tax vasai

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2014 We a manufacturing unit in Vasai. We purchase 80% of our raw materials outside Vasai municipality and 20% from local ( Vasai - VAT and LBT registered) dealers. We do not sell anything in Vasai municipality. Our customers are located outside Vasai municipality.

1. Do we still have to pay LBT?

2. Do we get any rebate or set-off?

CA Tejas Mistry

CA Tejas Mistry (Expert)
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20 November 2014 You have to pay LBT on the goods purchased from Outside Vasai Municipality

but you can claim 90% refund u/s 32 which is explained below

Where any goods which are imported in the city on which LBT has been paid, are
exported outside the city by the same person by way of sale or otherwise, then
90% of such amount of LBT so paid, shall be refunded to that person by order in
Form M, on satisfaction of following conditions:
• The details of import made for export are given in the relevant return
furnished.
• LBT on such import is paid within relevant return.
• Goods are exported within period of six months from date of importation.
• Relevant return claiming of refund after export is furnished.
• The person when asked by commissioner shall prove that goods imported
have been exported without making change in the goods; (i.e. in the same
form).
Proviso to the Rule 32 provides that if a dealer who is importing and exporting
taxable goods on a regular basis, the commissioner may allow such dealer to pay
10% of LBT, after obtaining a declaration from such dealer that the goods are to be
exported within the specified period.

Querist : Anonymous

Querist : Anonymous (Querist)

21 November 2014 The last condition mentioned that the goods imported should have been exported without making changes in the goods ( i.e. in the same form).

So in case of manufacturing unit, the raw materials are changed to finished products and sold outside the municipal limits.

Can the 90% refund be claimed under such scenario?

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CA Tejas Mistry

CA Tejas Mistry (Expert)
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22 November 2014 You can not claim 90% refund but if the application made to commissioner then he may allow refund looking at the individual facts of the case