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8. Certain sales and purchases not to be liable to tax

(1) Nothing in this Act or the rules or the notifications shall be deemed to impose or authorise the imposition of a tax or deduction of tax at source on any sale or purchase of any goods, where such sale or purchase takes place,-

(a) (i) outside the State ; or

(ii) in the course of the import of the goods into the territory of India, or the export of the goods out of such territory ; or

(b) in the course of inter-State trade or commerce, and the provisions of this Act and the said rules and notifications shall be read and construed accordingly.

Explanation.- For the purpose of this section, whether a sale or purchase takes place-

(i) outside the State, or

(ii) in the course of the import of the goods into the territory of India or export of the goods out of such territory, or

(iii) in the course of inter-State trade or commerce,

shall be determined in accordance with the principles specified in sections 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956).

(2) In accordance with the notification issued by the Central Government in exercise of its powers under section 3 of™ the Foreign Air craft (Exemption from Taxes and Duties on Fuel) Act, 2002 (36 of 2002), no tax shall be levied on the sales of fuel which are filled into receptacles forming part of any aircraft registered in a country other than India, if-

(a)the said country is a party to the Convention on International and Civil Aviation, 1944; and

(b)the said country has entered into an Air Services agreement with India; and

(c)the aircraft is operating on a scheduled or non-scheduled service to or from India.

1[(3) The State Government may, by general or special order published in the [Official Gazette], and subject to such conditions and restrictions as may be specified in the said order, exempt from payment of tax any class or classes of sales of goods made by any unit in the Special Economic Zone, a 1a[developer or co-developer] of the Special Economic Zone, any 3[export oriented unit], any unit in the Software Technology Park or any unit in the Electronic Hardware Technology Park.

Explanation.” For the purposes of this sub-section,”

(a) a unit in the Special Economic Zone means a unit,-

(i) situated in a zone which is declared as Special Economic Zone by the Central Government or, as the case may be, the State Government, and

(ii) which has been certified by the Commissioner;

(b) a unit in the Software Technology Park means a unit,”

(i) set up in accordance with the Software Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry, and

(ii) which has been certified by the Commissioner;

(c) a unit in the Electronic Hardware Technology Park means a unit,”

(i) set up in accordance with the Electronic Hardware Technology Park Scheme notified by the Government of India in the Ministry of Commerce and Industry, and

(ii) which has been certified by the Commissioner;

(3D) The State Government may, by general or special order published in the Official Gazette and subject to such conditions, exceptions and restrictions as may be specified in the said order, exempt fully or partially from payment of tax either prospectively or retrospectively, the transfer of property in goods involved in the sizing and warping of yarn.

(d) a 3[export oriented unit] means a unit,”

(i) which has been approved as a 3[export oriented unit] by the Board appointed in this behalf by the Central Government in exercise of the power conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951) and the rules made thereunder, and

(ii) which has been certified by the Commissioner.]

4[(e) a developer of the Special Economic Zone means a person,“

(i) or a body of persons, company, firm or Government undertaking, who develops, builds, designs, organizes, promotes, finances, or transfers by way of sale or lease, operates or maintains whole or a part of the infrastructure in the Special Economic Zone, and

(ii) who has been certified by the Commissioner ;

(e-a) a Co-developer means a person,-

(i) who has entered into an agreement with the Developer to develop, build, design, organize, promote, finance, or transfer by way of sale or lease, operate or maintain whole or a part of the infrastructure in the Special Economic Zone, and

(ii)who has been certified by the Commissioner;]

(f)a unit includes an establishment situated within the Special Economic Zone.

5[(3A) The State Government may, by general or special order, published in the Official Gazette, and subject to such conditions, exceptions and restrictions as may be specified in the said order, exempt from payment of tax any class or classes of sales of goods made by any registered dealer to any class of dealers specified in the Import and Export Policy notified from time to time, by the Government of India.

(3B) The State Government may, by general or special order, published in the Official Gazette, and subject to such conditions, exceptions and restrictions, as may be specified in the said order, exempt fully or partly, from payment of tax any class or classes of sales of goods made by,”

(a) any registered dealer to the Canteen Stores Department or the Indian Naval Canteen Services,

(b) the Canteen Stores Department or the Indian Naval Canteen Services to the unit run canteens or members of the armed forces,

(c) the unit run canteens to the members of the armed forces.]

6[Explanation.-For the purposes of this sub-section, members of the armed forces includes ex-servicemen and families of the deceased personnel of the armed forces]

8[(4) The State Government may by general or special order published in the Official Gazette, and subject to such conditions and restrictions as may be specified in the order, provide for exemption from payment of the whole of tax in respect of any class or classes of sales of goods effected by a unit holding a Certificate of Entitlement as defined under section 88 to whom incentives are granted under any Package Scheme of Incentives, by way of exemption from payment of tax.]

9[(5) The State Government may, by general or special order, published in the Official Gazette, and subject to such conditions and restrictions, if any, as may be specified in the said order, exempt fully or partly, from payment of tax, any sales or classes of sales of goods made by any registered dealer to,”

(a) the State Government,

(b) the Central Government,

(c) a generating company, as defined in the Electricity Act, 2003, for use in generation of electricity,

(d) a registered dealer, holding a licence for transmission under the Electricity Act, 2003, for use in transmission of electricity,

(e) a registered dealer, holding a licence for distribution of electricity under the Electricity Act, 2003, for use in distribution of electricity,

(f) the Mahanagar Telephone Nigam Limited,

(g) the Bharat Sanchar Nigam Limited,

10[(h) any telephone service provider, holding a licence granted under the Indian Telegraph Act, 1885 (13 of 1885) and the Indian Wireless Telegraphy Act, 1933 (17 of 1933), to establish, install, operate and maintain,-

(a)telephone service upto subscribers terminal connections, or

(b)national long distance service network, or

(c)international long distance service network;

(i)Telecom Infrastructure provider who has been granted registration certificate by the Department of Telecommunications, as Infrastructure Provider Category-1(IP-I).]

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1 .Sub-section (3) substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

1a. These words were substituted for the word developer by Mah. Act No. VIII of 2012 dated 25.4.2012 w.e.f.1.5.2012.

2. These words were substituted for the words hundred per cent. export oriented unit by Mah. Act No. XXV of 2007, dt. 6.8.2007 w.e.f. 15.8.2007. s.7(1) as per Notification No. VAT.1507/CR-57/Taxation-1, dt. 10.8.2007. s.7(1).

3. These words were substituted for the words hundred per cent. export oriented unit by Mah. Act No. XXV of 2007, dt. 6.8.2007 w.e.f. 15.8.2007. s.7(1).

4. Clause (e) added by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006 and again substituted by Mah. Act No. VIII of 2012 dated 25.4.2012 w.e.f.1.5.2012 prior to substitution clause (e) read as:
(e) a developer of the Special Economic Zone means a developer,“ (i) undertaking development, repairs, maintenance and improvement of the Special Economic Zone, and

(ii) who has been certified by the Commissioner;

5.Sub-sections (3A) & (3B) were inserted by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006. s.39(b). (for Clarification refer Commissioner Tr. Cir. No. 23T of 2006, dt. 11.9.2006)

6. The Explanation was added and shall be deemed to have been added w.e.f. 20th June, 2006 by Mah. Act No. XXV of 2007, dt. 6.8.2007. s.7(2).

7. Sub-section (3C) inserted by Mah. Act No. XXV of 2007, dt. 6.8.2007 w.e.f. 15.8.2007. s.7(3) as per Notification No. VAT.1507/CR-57/Taxation-1, dt. 10.8.2007.

7a. These words were added by Mah. Act No. VIII of 2012 dated 25.4.2012 w.e.f.1.5.2012.

8. Sub-section (4) substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

9. Sub-section (5) added by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006.

10. These sub-clauses were substituted by Mah. Act No. XXV of 2007, dt. 6.8.2007 w.e.f. 15.8.2007 as per Notification No. VAT.1507/CR-57/Taxation-1, dt. 10.8.2007. Prior to sub-clase (h) was substituted read as under :- (h) any telephone service provider, holding a licence granted under the Indian Telegraph Act, 1885 and the Indian Wireless Telegraphy Act, 1933, to establish, maintain and operate telephone services upto subscribers terminal connection.