Exemptions to MVAT

Following sales transactions are exempt from payment of tax under MVAT Act:
 Interstate sale is exempt from payment of sales tax and it may be liable to tax under C.S.T Act.
[Section 8(1)]
 Sales taking place outside the state as determined under Section 4 of the C.S.T Act. [Section
8(1)]
 Sales in the course of import or export. [Section 8(1)]
 Sales of fuels and lubricants to foreign aircrafts. [Section 8 (2)]
 Inter-se sales between Special Economic Zones, developers of SEZ, 100% EOU, Software
Technology Parks and Electronic Hardware Technology Park Units subject to certain conditions.
[Section 8 (3)]
 Sales to any class of dealers specified in the Import and Export Policy notified by the
Government of India [8(3A)]. This is subject to issue of notification by State Government under
this Section. However, no such notification is issued till today.
 As per Section 8(3B), the State Government may, by general or special order, exempt fully or
partially sales to the Canteen Stores Department or the Indian Naval Canteen Services.
 Under power granted u/s. 8(3C), the State Government, by general order, has exempted fully the
tax on works contract of processing of textiles covered in column 3 of the first schedule to the
Additional Duties of Excise (Goods of Special Importance) Act, 1957. By amendment in
Additional Duties of Excise (Goods of Special Importance) Act, 1957 the textiles are removed
from above Act with effect from 8th April, 2011. However, corresponding change is not made in
the above notification under the MVAT Act. Therefore, operation of the above exemption
Notification after 8th April, 2011 is subject to renewal of this Notification as per above amended
position.
 Sales effected by manufacturing units covered by Package Scheme of Incentives and under
exemption mode are exempt from payment of tax u/s. 8(4).
 As per Section 8(5), the State Government may, by general or special order, exempt fully or
partially sales to specific category of dealers mentioned in this sub Section. By Notification
dated 19.4.2007 concessional rate of tax @ 5% (4% upto 30th April, 2011) is provided for sale to
specified Electric Power Generating and Distribution Companies, MTNL, BSNL, other specified
telephone service providers and telecom infrastructure providers.
 One more notification dated 29th June, 2009 is issued by the State Government u/s. 8(5) by
which sale of certain specific goods for satellite launch system to the Department of Space,
Government of India is exempted from payment of tax with effect from 1st July, 2009.
 The State Government may issue the notification to grant refund of any tax levied on and
collected from any class or classes of dealers or persons or as the case may be, charged on the
purchases or sales made by such class or classes of dealers or persons (Section 41). At present
this notification is issued for grant of refund in case of Consulate and Diplomat authorities.
 As per Section 41(4)(b) read with Notification dated 30.11.2008 issued under the said section,
the sale of motor spirit at retail outlets is exempted from tax, if the retail outlet purchases the
same from registered dealer.
 Section 41(5) is introduced with effect from 1st May, 2011. As per this Section, the State
Government is empowered to provide exemption from the payment of full or part of the taxes
payable on any class or classes of sales of liquors by any class or classes of dealers. Using the
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powers granted u/s. 41(5), the State Government has issued a notification