VAT applicability on Organic fertilizer
(Querist) 23 June 2010
This query is : Open
In India though VAT has been introduced still aged old Sales Tax Acts/Rules are followed by and large. The Sales Tax department have not geared up understand the rapid technological development. Still they say organic manure is only Farm Compost. But by industrial process by fermentation method they are not considering the item as Organic manure and terming it as Organic fertilizer and claiming 4% VAT from Manufacturers, who are helping Govt.of India, to some extent in reducing Chemical Fertilizers draining out foreign exchange. At the same time the Indusries who manufacture Organic Manure through Indl.process (as per Tax authorities:Organic fertilizer) are not eligible for any subsidies from Central/State Government and only discouraging technogical development in India with age old knowledge. At the same time Department of Biotechnology, Ministry of Agriculture, Ministry of Chemicals and Fertilisers are also not taking any action to solve the problem of frequent harassment from respective Local Sales Tax authorities demanding Sales Tax and threatening to levy penalty,interest. Is there any way.If we have to approach Tribunals and Courts the industrialists are
asked to deposit 25% or 50% before going for appeal. There is again confusing in advance ruling and appellate authorities also.Please suggest a solution.