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(a) Prior to the Date of Commencement of Commercial Production, no goods and services tax, or any other value-added tax of general application, shall be levied or imposed on the following items to the extent that such items are purchased from third parties or related parties in the State or imported into the State by or on behalf of the Company for the purposes of the Project and are reasonable and necessary in accordance with Good Industry Practice to carry out the Project:

(a) All capital items, and supplies and consumables including fuel, exclusively and necessarily required for the Project; and
(b) Construction, mining and milling plant, machinery and equipment exclusively and necessarily required for the Project, provided that goods and services Tax or any other value-added Tax is payable in accordance with the Tax Law on all imported food items, alcohol, cigarettes, clothing (other than special protective clothing), shoes (other than special protective shoes), household appliances and utensils, and personal vehicles and effects.

(b) After the Date of Commencement of Commercial Production, all imported items are subject to goods and services tax, or any other value-added tax of general application, on a non-discriminatory basis in accordance with Applicable Law.
(c) If imported items purchased by or on behalf of the Company on which no goods and services tax or any other value-added tax is paid in accordance with this Section are not re-exported or totally consumed within the period of the first three (3) years after importation) and are thereafter sold, exchanged or transferred in the State, the Company shall be liable to pay goods and services tax or any other value-added tax, to the extent not previously paid, on the then fair market value of such items.
(d) [Sale of minerals produced for export shall be treated as zero-rated and therefore input GST/VAT on exported minerals]

Example 1
5.1 In accordance with the provisions of Applicable Law, goods and services produced by the facilities are taxable at a standard rate and zero rated if exported.

5.2 Government confirms that input VAT in excess of VAT payable in respect of the supply of goods and services shall be credited to Company within a reasonable period of time (and in any event within 30 days) from the date of submission of Company’s monthly VAT return in respect of each prescribed accounting period.

5.3 For the purposes of this Clause, “input VAT” shall mean VAT claimable in respect of allowable business purchases of goods and services supplied by a registered supplier during a prescribed accounting period.

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