Avdhesh (Dy. Manager (Accts)) 17 July 2012

Vat rate on catalyst (iron oxcide)

Please advise me rate of VAT under UP VAT Act-2008 applicable on sale of "Used Ammonia Sythesis Catalyst (Iron Oxide)".

One of our colleague is of openion that it contains 'Iron Oxcide; hence will cover under the Goods of special importance in inter-State trade or commerce as per section 14 of CST Act. and accordingly additional VAT @1% will not be applicable.

However we are charging 5% (VAT @4% plus Additinal VAT @1%).

Please advise to stand me with right action.

Regards,

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2 Replies

S.S. NIGAM (advocate(taxation) ) 17 July 2012

Dear Mr. Avdhesh,

You are right in charging @5% vat on Iron oxide, because it is already defined under the 2nd sch. of part C,and it does not cover under section 14of the C.S.T.act-1956.

CA Pradeep Kumar (DM(A)) 18 July 2012

Dear Mr. Nigam,

I agree that IRON Oxide is covered under Schedule II of UPVAT Act and VAT @ 5% is levied on it.

But Spent Ammonia synthesis catalysts which was originally an Iron Oxide has no oxidation properties when scraped. It is normaly purchased by iron manufacturers to produce Iron/ Steel.Section 14 of CST Act 1956 covers blooms and rejects form of the blooms which is an outcome of bloomery process taken from iron oxides or so. Therefore, we may call it simply an iron scrap and charge no Additional VAT on it. I have seen this process in Iron Industries also and can safely advice so.