MVAT - SALE/PURCHASE OF GOODS BY PSI UNITS

PSI Units: The units enjoying benefits, whether by way of exemption or deferral, under the Package Scheme of Incentives may continue to enjoy the same. However, after introduction of VAT, they have to effect their purchases by paying full tax and claim refund of such tax paid on their purchases. (There are no concessional forms, such as BC Forms, etc., which were available earlier under the Bombay Sales Tax Act/Rules).

Resale of goods purchased from PSI Units: As the units, enjoying exemption, do not charge tax on their sale, the subsequent dealer will not be in a position to take input tax credit. It is provided, therefore, that such subsequent dealer shall pay tax under the reduced value method; i.e., reducing the sale price by the amount of purchase price. Thus the tax is calculated on the amount of value addition only. Such a dealer, reselling goods purchased from PSI unit, shall make an additional declaration, as prescribed in Rule 77(2A), in his Tax Invoice or bill or cash memorandum as the case may be.