Motor vehicles not covered

CHATROOM

Only vehicles registered in the name of a specified service provider can get Cenvat credit.

We are manufacturers of iron and steel in eastern India. We are planning to buy Tata dumpers for internal handling raw material and finished products within the plant. We are buying these dumpers from a local dealer who is giving us Cenvat papers and VAT bill in our name. Kindly clarify whether we are entitled to avail Cenvat/VAT benefits which is being charged to us.

Which state you are located in is not clear. As per section 11 (5) (j) of Gujarat VAT Act, 2003, no input tax credit is admissible for purchase of vehicles of any type and its equipment, accessories or spare parts (except when purchasing dealer is engaged in the business of sales of such goods). You may check up your state VAT law for similar provision. Regarding Cenvat credit, the definition of capital goods at Rule 2(a) of Cenvat credit rules, 2004 does not cover vehicles, except motor vehicles registered in the name of specified service providers. So, you can not take Cenvat credit of duty paid on vehicles.

We are a small scale unit working under notification no. 08/2003. We pay full excise duty right from first clearance and avail Cenvat on inputs. We have received orders from manufacturing units set up in SEZs asking us to dispatch material and claiming that excise duty and central sales tax will not be applicable to them. The goods are required to be dispatched under ARE-1 form. Please provide us details of procedures to be followed in dispatching excise duty free and CST free material to SEZ units and the precautions and safeguards to be observed by us. Secondly, can we buy raw material with out excise duty or CST payment for above sales to SEZ and I so, please give the details.

You may refer to rule 30 of SEZ rules, 2006 that deals with the procedures for dispatch of goods from DTA to SEZ without excise duty payment. For the 'Form I' procedure for claiming CST exemption on sales to SEZ units, please refer to notification no. 24/2003-ST (F.No. 31/72/2002-ST) dated 23.05.2003 (as amended on 7.6.2005) issued under the central sales tax laws. There is no specific provision to obtain excise duty free and CST exempt raw materials for manufacture of goods to be supplied to SEZ. You may, however, consider taking advance license and procuring your raw materials under deemed export provisions.

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