Section 17 of Bihar VAT : Section 17: Exports To Be Zero-Rated

Explanation using Example

Imagine a company in Bihar, "Bihar Handicrafts Exporters," that manufactures and sells traditional handicrafts. They receive an order from a client in France. The company sells these goods to the client, which constitutes a sale in the course of export under section 5 of the Central Sales Tax Act, 1956.

According to Section 17(1) of The Bihar Value Added Tax Act, 2005, Bihar Handicrafts Exporters would not have to pay tax on the turnover from this sale. Moreover, they can claim a credit for the input tax they paid on the materials purchased to create the handicrafts that are being exported.

For example, if they bought wood and paint from local suppliers and paid VAT on these purchases, they can claim a credit for this input tax against their VAT liability. This benefit is available because the final products are being sold in the course of export, outside the customs territory of India.

In another scenario, if an NGO registered in Schedule V of the Act purchases office supplies in Bihar, they can apply for a refund of the tax paid on these goods. They must submit an application to the prescribed authority within the timeframe and in the manner set out by the Act.