Supply of Ready Mix Concrete to SEZ Eligible for VAT Exemption: AAR [Read Order]

The Authority for Clarification And Advanced Ruling ,Tamil Nadu on 22^nd May, Clarified that supply of ready mix concrete to SEZ is exempted from tax as per the terms and conditions laid down in the Government Order dated 30.12.2006.

Tvl.RMC Ready Mix(India) a registered dealer based in Chennai had sought a clarification for the rate of tax on the supply of ready mix concrete to SEZ,M/s.Estancia IT Park Pvt.Ltd. They had also made a request to clarify whether they can avail Input Tax Credit for the supply of raw materials purchased to produce ready mix concrete for the above supply. The clarification is provided with reference to Section 48-A (1) of the Tamil Nadu Value Added Tax Act 2006 (TNVAT Act 2006), read with Rule 12-A of the Tamil Nadu Value Added Tax Rules,2007 (TNVAT Rules 2007).

The AAR held that Section 18(1)(ii) of the TNVAT Act 2006 read with the Government Notification on 30.12.2006,provides that there is an exemption in sales tax payable by any dealer on the sale of any good made by such dealer to a registered dealer for the purpose of setting up, operation, maintenance, manufacture, trading ,production, processing ,assembling, repairing, reconditioning, re-engineering, packaging, or for use as packing materials or packing accessories in a unit locate in Madras Special Economic Zone (MEPZ),Tambaram  and other Special Economic Zone Located in Tamil Nadu. It is further provided that such registered dealers should be authorized to establish such units or such other establishments within the Special Economic Zones or is authorized to develop, operate and maintain such SEZs in accordance with the notification on 30.12.2006.Therefore supply of ready mix concrete to SEZ is exempted from VAT.

The AAR also clarified that sale of Electrical goods for the execution of works contract in SEZ unit is also exempted from tax as per the above said Government Notification.