Office of the
Commissioner of Sales Tax,
(GST), 8th floor, GST Bhavan,
Mumbai, dated 11/10/2018
Ref. (1) Trade Circular No. 8T of 2005 dated 9th March 2005.
1. You may recall that sub-section (6) of section 8 of the Central Sales Tax Act, 1956 (hereinafter referred to as “CST Act”) with effect from 10th September 2004 provides that no tax shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce 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 material or packing accessories in an unit located in any special economic zone or for development, operation and maintenance of special economic zone by the developer of the special economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such special economic zone.
2. The sub-section (7) provides that the goods referred in sub-section (6) shall be the goods specified in the certificate of the registration of the registered dealer and the benefits provided under sub-section (6) shall be available only if the said registered dealer selling such goods furnishes to the prescribed authority a declaration in FORM-I, (duly filled in and signed by the registered dealer to whom such goods are sold), appended to the CST (Registration and Turnover) Rules, 1957. This is a mandatory requirement to avail the exemption benefits provided under section 8(6) of the CST Act.
3. Further, as per the provisions of section 8(4) the CST Act with effect from the 10th September 2004, the declaration in Form ‘I’ was to be obtained from specified authority of the Central Government i.e. Commissioner of Special Economic Zone (SEZ). However, in some of the State(s) the aforesaid facility is not available, and still the Sales Tax/Commercial Tax Department is issuing the declaration in Form-“I”, instead of being issued by the Development Commissioner of the SEZ. Accordingly a Trade Circular cited at Ref. (1) above was issued and the Trade was made aware about the amended provisions of the CST Act. It was specifically stated that the declaration in Form “I” obtained from the Development Commissioner of the SEZ would only be treated as valid declarations.
4. However, the Trade from time to time has raised the difficulty that in other State(s) the declaration in Form-I is still being issued by the Sales Tax/Commercial Tax Department. In view of these difficulties faced by the Trade a Circular cited at Ref. (2) above was issued on 20th June 2009 and it was stated that the declaration in Form-1″ issued by the Sales/Commercial Tax Department would be valid till 19th June 2010.
5. It was also stated in that Circular (19T of 2009) that the issue with regards to acceptance of declaration in Form-“I” issued by the Sales/Commercial Tax Department will be re-viewed/examined after one year i.e. on or before 19th June 2011.
6. It has been, however, brought to the notice of this office that in some States declaration in Form ‘I’ are still being issued by Sales Tax/Commercial Tax authorities. In the light of the Circular instructions contained in the Circular cited at Ref. (1) and (2) above, during assessment proceedings, these declaration in Form-I, are rejected by Sales Tax authorities in Maharashtra, being invalid as same are not issued by the prescribed authority i.e. Development Commissioner of SEZ.
7. On this background, the Trade has represented the difficulties faced as above. The issue has been examined. Now, therefore, considering the genuine difficulty faced by the Trade in this respect, the instructions contained in Trade Circular No. 19T of 2009 dated 20th June 2009, are being modified. All the Sales Tax authorities undertaking assessments, appeals, or, as the case may be, review, are hereby directed not to disallow the claims made under section 8(6) of the CST Act, merely on the ground that the declarations in Form ‘I’ are issued by Sales Tax/Commercial Tax authorities of other States. Needless to say that the such declaration submitted by the dealer claiming benefits need to fulfill all other requirement given in section 8 of the CST Act regarding the allowance the claim of sales made to SEZ developer or SEZ unit.
8. The concession accorded under this Trade Circular shall remain in force till one year from the date of issuance of this Trade Circular. The Trade and Associations in other State(s) may request the appropriate authorities in the State(s) to follow the procedure given in the CST Act with regards to the issuance of the declaration in Form “I” in the other State(s).
9. You are requested to bring the contents of this circular to the notice of all the members of your association.
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
Mumbai, dated 11/10/2018
Trade Circular No. 27 T of 2018.
Copy forwarded for information and necessary action to,-
(1) The Joint Commissioner of Sales Tax, (MAHAVIKAS) with a request to upload this Trade Circular on MGSTD web-site.
(2) Deputy Secretary, Finance Department, Mantralaya, Mumbai.
(3) Accounts Officer, Sales Tax Revenue Audit, Murpbai and Nagpur.
(Dr. B.N. Patil)
Joint CommiaSione of Sales Tax,
(HQ) 1, Maharashtra State, Mumbai.