Sandeep Gupta (Advocate) 19 September 2011

Vat/cst on by products

Department view is that the by-product remained after the manufacturing process will not be treated as manufactured goods and shall bie liable to be taxed under the head of trading. As we are under tax holiday and getting the benifit of concessional rate of tax on manufactured goods, wheather the by-product remained after the manufacturing process will be treatde as manufactured goods or not.

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Maharamchandra (Proprietor) 28 September 2011

Under concerned state vat act incident of tax is on sale of goods and under excise law incidence of tax is on production or manufacture of excisable goods manufactured in india, in the instant case by-product must satify the vendibility criteria and commercially know in the marker, and which can ordinarily bought and sold in the market.

If the aforesaid criteria are satisfied and by-product is sold in the ordinary course of trade then vat shall be payable on the by product subject to condition that sales are affected by the dealer, for the purpose of excise law if said criteria is satisfied then as per Section 3 of Central Excise Act, 1944 excise shall be leviable on the by-product.

thanks.