Office of the

Commissioner of Sales Tax

8th floor, Vikrikar Bhavan,

Mazgaon, Mumbai-10.

To,

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No.VAT-2006/ACT/Adm-13/PSI/140/B-685,Mumbai,dt:19.12.2006.

Circular No. 37 T of 2006.,Dated 19th December, 2006.

Sub : Amendments in the Package Scheme of Incentives - 1993 (PSI-1993) and Package Scheme of Incentives Introduced prior to PSI-1993.

Ref : 1. Government Resolution No. IDL-1005/ (C.R.3509)/ IND-8, dated: 29.07.2006.

2. Government Notification No.STR-1506/CR-38/Taxation-1,dated: 08.09.2006.

3. Trade Circular No.18T of 2006 dated:01.08.2006 issued by this office.

Gentlemen /Sir /Madam,

1. The Govt. has issued Government Resolution dated:29.07.2006 referred at Sr. 1 above, to amend the Package Scheme of Incentives - 1993 (PSI-1993), and Package Schemes of Incentives introduced prior to PSI-1993, in view of introduction of the Maharashtra Value Added Tax Act with effect from 01.04.2005. As per the said G. R., following changes have been made in the PSI-1993 and PSIs introduced prior to PSI-1993.

a. One more opportunity has been given to the Eligible Units to opt for switching over from Deferral Mode to Exemption Mode and vice-versa, to those units who have already exercised the option;

b. The switch over from one mode to the other shall come into effect from the 1st day of the month, succeeding the month, in which the implementing agency has granted permission for the switch over;

c. The amendments in sub-paras a & b above shall be effective from 01.07.2006 and

d. From 01.04.2005, the eligible units under the PSI-1993 and PSIs introduced prior to PSI-1993, which are manufacturing tax free goods and availing of benefits under the exemption mode shall be allowed full refund of tax paid on the purchases of raw-materials and fuel.

2. Due to amended Rule 79 of the MVAT Rules, 2005, by Notification dated:08.09.2006, the changes in the PSIs as per above Para 1(d), have become operative with effect from 01.04.2005.

3. Trade Circular No.18T of 2006, dated:01.08.2006 was issued prescribing the procedure for grant of refund. In the said circular in Para No.3, it has been stated that the Circular is applicable to the cases where applications in Form No.501 has been made on or before 31.07.2006.

In view of the amendments to the Rule 79 of the MVAT Rules by Notification dated:08.09.2006 referred to at Sr. 2 above, it is hereby clarified that the Circular No.18T of 2006 is applicable to the dealers availing of benefits under various Package Schemes of Incentives and who are entitled for additional Refund dueto amendments to Rule 79. The Refund claims of such dealers shall be processed as per the procedure laid down in the Trade Circular No.18T of 2006, even if the applications are made after 31.07.2006.

4. This Circular is only clarificatory in nature and it cannot be used for legal interpretation. If any person has any doubt, he may refer the matter to this office for clarification.

5. You are requested to bring the contents of this Circular to the notice of the members of your Association.

( B. C. KHATUA)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.