In exercise of the powers conferred by sub-clause (e) of clause (i) of section 72 of the Madhya Pradesh Vat Adhiniyam, 2002 (No. 20 of 2002) (hereinafter referred to as the Vat Adhiniyam) and sub-section (5) of section 8 of the Central Sales Tax Act, 1956 (No. 74 of 1956) (hereinafter referred to as the Central Act), the State Government, hereby, notifies the following scheme in respect of industrial units or hotels eligible to avail the facility of exemption from payment of tax under the following notifications issued under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) (hereinafter referred to as the Vanijyik Kar Adhiniyam), the Adhiniyam repealed by the Vanijyik Kar Adhiniyam and the Central Act :-

2. The registered dealers who are eligible to avail the facility of exemption from payment of tax under the said notifications immediately before the commencement of the Vat Adhiniyam and would have continued to be so eligible had the Vat Adhiniyam not come into force, and holding an eligibility certificate for the purpose, shall continue to avail the facility subject to the restrictions and conditions specified in Para 3 below and the said notifications shall be deemed to have been continued with the amendments accordingly.

3. (1) The facility shall be available for the unexpired period of eligibility certificate or to the extent of balance of cumulative quantum of tax as on 1st April, 2006, whichever is earlier ;

(2) The dealer shall make purchases from registered dealers after payment of tax and be eligible to collect the tax payable on the goods, including by- products and waste products, manufactured and sold within the State;

(3) If the goods manufactured are the goods including by- products and waste products, specified in Schedule II of the Vat Adhiniyam, the dealer shall compute his tax liability by deducting input tax rebate from tax collected on sales with in the State and be eligible to retain the amount of tax collected, which is in excess of the input tax rebate. The amount so retained shall be included in computation of cumulative quantum of tax benefit ;

(4) The dealer shall continue to avail the facility of exemption from payment of tax in respect of the goods, including by-products and waste products, manufactured and sold in the course of inter - State trade or commerce. The amount so exempted shall be included in computation of cumulative quantum of tax benefit;

(5) The dealer shall continue to avail the facility of exemption from payment of purchase tax. The amount so exempted shall be included in computation of cumulative quantum of tax benefit;

(6) If the goods manufactured are the goods specified in Schedule I of the Vat Adhiniyam or the goods specified in Schedule II of the Vat Adhiniyam are transferred outside the state, the dealer shall be eligible to claim and be allowed full input tax rebate on the goods used or consumed in the manufacture of the goods, including by-products and waste products. The amount equal to the input tax at the rate at which it is realised for this type of transactions, shall be included in computation of cumulative quantum of tax benefit;

(7) The dealer shall be eligible to first adjust the balance of input tax rebate, if any, against any other tax liability of self and to transfer the remaining balance for adjustment against the tax liability of any other registered dealer, if desired. The dealer shall make an application to the assessing authority along with return giving details of tax liability of self or the registered dealer in whose favour the balance of input tax rebate is to be adjusted or transferred. The assessing authority shall make the assessment in accordance with the provisions of clause (b) of sub-section (1) of section 20 of the Vat Adhiniyam and after determining the balance of input tax rebate, adjust or transfer the balance by issue of refund adjustment order. The provisions of section 37 of the Vat Adhiniyam shall mutatis mutandis apply to such adjustment.