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Sunday, August 26, 2012

REGISTRATION


CHAPTER - IV

   Persons liable to register.
 
REGISTRATION

21.       (1)       No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act.
(2)     Every person required to be registered under sub-section (1), shall make an application for registration, within a period of thirty days from the date when such person becomes liable to pay tax under this Act, in the prescribed manner to the designated officer.
(3)     If the designated officer is satisfied that the application for registration is in order, he shall, in accordance with such manner and on payment of such fee, as may be prescribed, register the applicant and grant him a registration certificate in the prescribed form:
Provided that if the designated officer is satisfied that the particulars contained in the application are not correct, or are incomplete or that any evidence or information required for registering the applicant, is not furnished, he may, after necessary inquiry and after giving the applicant an opportunity of being heard, reject the application for reasons to be recorded in writing. However, the applicant may submit a fresh application for registration in accordance with the provisions of this Act:
Provided further that during the pendency of an application for registration, he shall file return and pay the due amount of tax, in the prescribed manner.
(4)     Where a person has contravened the provisions of sub-section (1), the designated officer shall, subject to action under section 52 or section 60, as the case may be, register such person and grant him a registration and such registration shall take effect as if, it had been granted  under sub-section (3) on the application made by the person.
(5)     When any person, who was registered before the appointed day under the repealed Act, and continues to be so registered on the day, immediately before such appointed day, and is liable to pay tax under this Act on such appointed day, the designated officer shall, within thirty days of receipt of application in the prescribed form, issue to such person, in the prescribed manner, a fresh registration under this Act for VAT or TOT, as the case may be.
(6)     For the purpose of identification of taxpayers, the Commissioner or the designated officer, shall issue a VAT Registration Number ( hereinafter in short referred to as VRN) to every taxable person and TOT Registration Number (hereinafter in short referred to as TRN) to every registered person.
(7)     Every taxable person or a registered person, who is allocated a registration number, shall mention his VRN or TRN, as the case may be, in all returns, forms or any other documents, used for the purposes of this Act.
(8)     Every person, who is liable to pay tax, and who is a Hindu undivided family or an association of persons, club or society or firm or company or, who is engaged in business as the guardian or trustee or otherwise on behalf of another person, shall make a declaration to the designated officer, stating the name of the person or persons, who shall be deemed to be the manager or managers of such person’s business for the purposes of this Act.
(9)     Save as otherwise provided in section 77, a registration, granted under this Act, shall be personal to the person to whom it is granted and shall not be transferable.
   Voluntary   registration
   for VAT.
 
 
22.    (1)     Subject to the provisions of sub-section (3) of section 6, any person except one dealing exclusively in goods declared tax-free under section 16, may apply in the prescribed manner to the designated officer for registration under this Act.
(2)     The provisions of sub-sections (2), (3) and (5) of section 21, shall apply in respect of applications for registration under this section.
(3)     Every person, who has been registered upon application made under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act whether his gross turnover exceeds the taxable quantum or not.
     Amendment
     of registration.
 
 
23.    The designated officer may from time to time, by order in writing, amend registration on information furnished under section 76.
     Cancellation
      of registration.
 
 
24.    (1) The designated officer may, on an application made to him, or otherwise, by an order in writing, cancel registration, on -
(a)         an information received that a business, in respect of which a registration was granted under sub-section (3) of section 21, has been discontinued; or
(b)         an information received that the person has violated any of the provisions of this Act or the rules made there-under; or
(c)          non-filing of return or non-payment of due tax under this Act; or
(d)         any other sufficient cause including misuse of the registration or cessation of liability to payment of tax under this Act; or
(e)         the registration granted under the Central Sales Tax Act, 1956, to a person liable to pay tax by virtue of the provisions of section 7,  but who is not otherwise liable to pay tax under section 6, has been cancelled.
(2)              Where registration is cancelled under this section without making an application by the person concerned, no order for such cancellation shall be passed by the designated officer, without affording an opportunity of being heard.
   Security from certain classes of persons.
 
 
25.    (1)     Every person applying for registration under this Act, shall furnish a security of rupees fifty thousand in the manner, prescribed for securing proper and timely payments of tax or any other sum, payable by him under this Act:
Provided that the security already furnished by a person registered under the repealed Act, shall be deemed to have been furnished under this Act. 
(2)     The designated officer granting registration, may, on application made by a person for release, discharge or refund of the security, order the release, discharge or refund of the whole security or any part thereof, furnished by him, if the same is not required.
Explanation.- The designated officer shall not be required to retain security or surety furnished by a person on behalf of a taxable person or registered person, if the registration of such a person has been cancelled under this Act and nothing remains due against such a person.
(3)     Where it appears expedient to the designated officer, granting registration, so to do, for the proper realisation of, tax payable under this Act, he may, at any time while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the person, to whom the registration has been granted, to furnish within such time, as may be specified in the order and in the prescribed manner, such additional security, not exceeding rupees two lac in addition to the security, furnished under sub–section (1), as may be specified in the order, for the aforesaid purpose:
Provided that no person shall be required to furnish any additional security under this sub-section, unless he has been given an opportunity of being heard.
(4)     The designated officer, granting the registration, may, by an order in writing, for good and sufficient cause, forfeit or realise the whole or any part of the security or additional security furnished by a person for recovery of any amount of tax or penalty due or payable by a person:
Provided that no order shall be passed under this sub-section without giving the person concerned, an opportunity of being heard.
(5)     In case the security is rendered insufficient because of the order made under sub–section (4), the person concerned shall furnish further security to make up for the amount, which has fallen short, in such manner and within such time, as may be prescribed.

LEVY OF PURCHASE TAX


CHAPTER – III

LEVY OF PURCHASE TAX

   Levy of purchase tax
   on certain goods.
 
 
19.    (1)     Notwithstanding anything contained in this Act, there shall be levied VAT on the taxable turnover of purchase of the goods specified in Schedule-H at the rate applicable to such goods as per the Schedules.
(2)     The tax shall be leviable on the first purchase of these goods from within the State. In case of Milk, however, first purchase shall be, when purchase is made by a manufacturer of taxable goods:
      Provided that on subsequent sales of such goods, VAT on sale price shall be leviable as per the provisions of this Act.
(3)     Subject to the provisions of this Act, the purchaser of the goods, specified in Schedule-H, shall have to be registered for VAT.
(4)     The purchase tax paid by a taxable person, shall not be admissible as input tax credit, unless the goods are sold within the State or are used for manufacture  of  taxable  goods in the State for sale or are sold in the course of inter-State trade or commerce or in the course of export:
          Provided that if, purchases are used partially for the purpose of manufacture of taxable goods and partially for the purpose  of manufacture of tax free goods, then the purchase tax paid by a person shall be allowed to be treated as input tax credit proportionately, to the extent, the purchases are used for such purposes in the prescribed manner.
(5)     Input tax credit, on goods liable to tax under sub-section (1), when sold in the course of inter-State trade or commerce, shall be available only to the extent of Central Sales Tax chargeable under the Central Sales Tax Act, 1956.
   Levy of tax on turnover of purchase of goods in certain circumstances.
 
 
20.       (1)       Where a taxable person purchases taxable goods from a person other than a taxable person or a registered person, and -
(a)         uses such goods in the manufacture of goods, declared tax-free under section 16; or
(b)         uses such goods in the manufacture of any goods other than those specified in Schedule-A, and sends the goods so manufactured outside the State otherwise than by way of  sale in the course of inter-State trade or commerce or exports out of India; or
(c)          disposes of such goods in any manner other than by way of sale in the State; or
(d)         despatches them to a place outside the State otherwise than as a  result of sale in the course of inter-state sale, trade or commerce or export out of India,
there shall be levied a tax on the taxable turnover of purchases  of such goods at the rate applicable to such goods as per  the Schedules :
Provided that no tax shall be levied under this section, if a tax has already been paid on such goods under section 19.
(2)     Where a registered person purchases taxable goods from a person, other than a taxable person or a registered person, and disposes of such goods in any  manner, there shall be levied a tax on the turnover of such purchases at the rate(s) specified in the Schedule(s).

incidence and levy of VAT




CHAPTER – II

   Incidence of  tax.
 
INCIDENCE AND LEVY OF TAX

6.         (1)         Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (a) of sub-section (3), shall be liable to pay tax under this Act by way of VAT on the taxable turnover.
(2)          Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (b) of sub-section (3), shall be liable to pay tax under this Act by way of TOT on the taxable turnover.
(3)          For the purpose of this section, the expression ‘taxable quantum’ means-
(a)     for registration as a taxable person for VAT -
(i)            in relation to any person, who imports taxable goods for sale or use in manufacturing or processing any goods in the State, rupee one;
(ii)          in relation to a person, who receives goods on consignment/branch transfer basis from within or outside the State on which no tax has been paid under this Act, rupee one;
(iii)        in relation to a person, liable to pay purchase tax under section 19, rupee one; 
(iv)        in relation to a person, who is a manufacturer, rupees one lac;
(v)          in relation to a person, who is running a hotel/restaurant, rupees five lac;
(vi)        in relation to a person, who is running a bakery, rupees ten lac;
(vii)      in relation to voluntary registration, rupees five lac; and
(viii)    in relation to any other person, rupees  fifty lac.
(b)     for registration as a registered person for TOT
  
 
in relation to a  person other than those specified in clause (a)  whose turnover during the preceding year is more than rupees five lac, but below  rupees  fifty lac.
(4)     Every person, who has become liable to pay tax under this Act, either by way of VAT or TOT, shall continue to be so liable, until the expiry of three consecutive years during each of which his gross turnover does not exceed the taxable quantum and such further period after the date of such expiry, as may be specified by notification by the State Government and on the expiry of such specified period, his liability to pay tax, shall cease.
(5)     Every person  whose liability to pay tax has ceased under sub-section (4), shall again be liable to pay tax under this Act from the date on which his gross turnover again exceeds the taxable quantum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
(6)     Every casual trader shall be liable to pay tax under this Act by way of VAT on the taxable turnover including sales through agent within the State.

      Liability of   person registered
       under   the    Central Sales Tax Act, 1956.
 
7.      The person registered under the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), shall be liable to pay VAT under this Act on any sale made by him within the State, irrespective of the fact that he is not liable to pay tax under section 6 of this Act.  However, the provisions of this section shall not apply in case of a person, who deals exclusively in goods declared tax free under section 16.
      Rate of
      Value Added Tax.
 
 
8.         (1)       Subject to the provisions of this Act, there shall be levied on the taxable turnover of a person other than a registered person, VAT at such rate, as specified in Schedules, but not exceeding thirty paise in a rupee:
Provided that the rate of tax applicable on purchase or sale of declared goods, shall not exceed four percent or such rate, as specified in clause (a) of section 15 of the Central Sales Tax Act, 1956.
(2)          Notwithstanding anything contained in this section, where any goods are sold in container or are packed in any packing material, the rate of tax applicable to such container or packing material, shall, whether the price of the container or packing material is charged separately or not, be the same as is applicable to the goods, contained or packed therein and the turnover in respect of the container and packing material, shall be included in the turnover of such goods. Where the goods, sold in container or packed in packing material are tax free, the sale of such container or packing material shall also be tax free.
(3)          The State Government after giving fifteen days notice by notification, of its intention so to do, may by like notification, alter the rate of tax specified in any of the Schedules, add to or omit from or otherwise amend the Schedules and thereupon, the Schedule shall be deemed to have been amended accordingly:
Provided that if, the State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may, for reasons to be recorded in writing, dispense with the condition of previous notice.

   Rate of Turnover Tax.
 
9.         Subject to the provisions of this Act, there shall be levied on the taxable turnover of sales of a registered person, TOT at a rate, not exceeding two paise in a rupee, as the State Government may specify, by notification, in the Official Gazette.
Rounding off of tax.
 
 
10.    The amount of VAT or TOT shall be calculated to the nearest rupee by ignoring fifty paise or less and counting more than fifty paise as one rupee.
   Bar against  collection of tax when not payable.
 
 
11.    (1)     No person, who, is not registered under this Act or if registered, is not liable to pay tax in respect of any sale or purchase, shall collect any amount by way of tax from any person.
(2)     No person, who is registered under this Act, shall collect any amount by way of tax in excess of the amount of tax leviable under this Act.
(3)     No person, who is registered under this Act, shall collect any amount by way of tax in respect of sale of goods, which are tax free under section 16.
(4)     If a person collects tax in contravention of the forgoing provisions of this Act, he shall be liable to deposit the tax so collected immediately after such collection, in the Government treasury. In the event of failure of such person to deposit the tax, the Commissioner or the designated officer, as the case may be, shall, by order in writing, recover such tax, as per provisions of this Act.

   Liability of
   registered persons.
 
12.    (1)     Liability of a registered person shall be calculated at the rate, specified under section 9.
(2)     Sale of taxable goods held in stock by a registered person on the appointed day, which were purchased without payment of tax under the repealed Act, shall be liable to tax at the rate, specified for those goods under this Act.

 
(3)     A registered person, whose registration has been continued under section 21, shall furnish in such form and to such authority, as may be notified, a statement of taxable goods under this Act, held in stock on the appointed day, within a period of thirty days from the appointed day.
(4)     A registered person shall not be entitled to input tax credit for any purchase.
(5)     A registered person shall issue only a retail invoice for sale made by him and shall not be eligible to issue a VAT invoice.
(6)     A registered person shall not be eligible to hold registration under the Central Sales Tax Act, 1956.
   Input tax credit.
 
 
13.    (1)     A taxable person shall be entitled to the input tax credit, in such  manner and subject to such conditions, as may be prescribed, in respect of input tax on taxable goods, including capital goods,  purchased by him from a taxable person within the State during the tax period:
Provided that such goods are for sale in the State or in the course of inter-State trade or commerce or in the course of export or for use in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-State trade or commerce or in the course of export:
Provided further that a taxable person shall be entitled to partial input tax credit in any other event, as may be provided in this section in such manner and subject to such conditions as may be prescribed:
Provided further that if, purchases are used partially for the purposes specified in this sub-section and the taxable person is unable to identify the goods used for such purposes, then the input tax credit shall be allowed proportionate to the extent, these are used for such purposes, in the prescribed manner:
Provided further that input tax credit in respect of purchase tax paid or payable by a taxable person under section 19, shall be allowed subject to the conditions laid therein.
(2)     Input tax credit shall be allowed only to the extent by which the amount of tax paid in the State exceeds four percent on purchase of goods –
(a)         sent outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of territory of India; and
(b)         used in manufacturing or in packing of taxable goods sent outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India.
        (3)              Where a taxable person sends any goods as such or after being partially processed for further processing on job work basis, he shall debit the ITC by  four percent of the value of such goods. If such goods after processing are received back by such person, the ITC debited at the time of despatch, shall be restored. Such person shall, however, be required to produce proper evidence in the shape of records, challans or memos or any other document evidencing receipt of such goods, whenever asked for.   
(4)   Input tax credit on furnace oil, transformer oil, mineral turpentine oil, water methanol mixture, naphtha and lubricants, shall be allowed only to the extent by which the amount of tax paid in the State exceeds four per cent:
Provided that these goods are used in production of taxable goods or captive generation of power.
(5)     A taxable person under this section, shall not qualify for input tax credit in respect of the tax paid on purchase of, -
(a)        automobiles including commercial vehicles, two wheelers, three wheelers and spare parts for the repair and maintenance thereof, unless the taxable person is in the business of dealing in such automobiles or spare parts;
(b)        petrol, diesel, aviation turbine fuel, liquefied petroleum gas and condensed natural gas, unless the taxable person is in the business of selling such products;
(c)          civil structure   and immovable goods or properties;
(d)        office equipment and building material, unless the taxable person is in the business of dealing in such goods;
(e)        furniture fixtures including electrical fixtures and fittings, unless the taxable person is in the business of such goods;
(f)  air-conditioning units, air circulators and refrigeration units, unless the taxable person is in the business of dealing in such goods or where air-conditioning, air circulating or refrigeration is essential for sale or storage of taxable goods or in the manufacturing process of taxable goods;
(g)        weigh bridge, except when installed inside the manufacturing premises for use in the  manufacturing process of taxable goods;
(h)        goods used in manufacture, processing or packing of goods specified in Schedule ‘A’;
(i)   goods used in generation, distribution and transmission of electrical energy unless such generation, distribution and transmission of electrical energy is for captive consumption, in which case, it would be allowed subject to the provisions of sub-section (4) of this section;
(j)           the provisions of food, beverage and tobacco products, unless the taxable person is in the business of selling food, beverage and tobacco products; and
(k)         goods used for personal consumption or gifts.
(6)     A person, who was earlier registered for VAT and has subsequently got himself registered for TOT, shall reverse the input tax credit availed by him before such change of option, on the stock of goods held by him on the day, when he is registered as a registered person.
(7)     A person, who was earlier registered for TOT and has subsequently got himself registered for VAT, shall not be entitled for input tax credit on the stock of goods held by him on the day, when he got registered as a taxable person and shall be liable to pay TOT on such stock, if sold within thirty days from such date.
(8)     A person, who exports goods out of India and has claimed refund of input tax under sub–section (2) of section 18, shall reverse the input tax credit, if any, availed by him on such goods.
(9)     A person shall reverse input tax credit availed by him on goods which could not be used for the purposes specified in sub-section (1) of this section or which remained in stock at the time of closure of the business.
(10)   Where the selling taxable person has made any modification in respect of a sale by issuance of debit or credit note on the invoice book, the purchasing taxable person shall make necessary adjustment of input tax credit availed.
(11)   Input tax credit shall be non-transferable, except where the ownership of the business of a person is entirely transferred.
(12)   Save as otherwise provided hereinafter, input tax credit shall be allowed only against the original VAT invoice and will be claimed during the period in which such invoice is received.
(13)   In case the original VAT invoice is lost or mutilated, the input tax credit will be available only after the designated officer has determined the credit in the prescribed manner.
(14)   If upon audit or cross verification or otherwise, it is found that a taxable person has made a false input tax credit claim, the Commissioner or the designated officer, as the case may be, shall order for recovery of the whole or any part of such input tax credit, as the case may be, without prejudice to any action or penalty provided for in this Act.
(15)  The onus to prove that the VAT invoice on the basis of which, input tax credit is claimed, is bonafide and is issued by a taxable person, shall lie on the claimant.
   Input tax credit in respect of stock held on the appointed day.
 
 
14.    (1)     A taxable person, who was registered under the repealed Act and
whose registration has been continued under section 21, shall be entitled to input tax credit in respect of the tax paid or payable under the repealed Act on the goods, other than capital goods, lying in stock with him on the appointed day, to such extent and in such manner and subject to such conditions, as may be prescribed. He shall, however, be eligible for input tax credit on capital goods, if he is in the business of resale of such goods:
Provided that such stock is out of the purchases made within twelve months prior to the appointed day. 
(2)     The taxable person, who intends to claim input tax credit under sub-section (1), shall within forty five days from the appointed day, furnish in the specified form to the designated officer, a statement of tax-paid goods held in stock.

 
(3)     Input tax credit shall not be available on goods held in stock on the appointed day in respect of which, deduction from gross turnover was claimed by such person under the repealed Act or rules.
(4)     Input tax credit on the stock, held on the appointed day, shall be allowed on the basis of the rate of tax, prevailing on the day preceding the appointed day or on the day of purchase of such goods under the repealed Act or the rate of tax, leviable under this Act, whichever is the lowest.
(5)     Input tax credit available under this section, shall be proportionately adjusted in equal installments over a period of one year beginning after three months from the appointed day in such manner, as may be prescribed.
(6)     No input tax credit under this section shall be allowed in respect of goods held in stock -
(a)         which are not included in the statement of taxable goods specified under sub-section (2); and
(b)     for which the person does not have in his possession sales vouchers, issued by a person, registered under the repealed Act, against the purchases of the said goods, or which are not recorded in his books of accounts.    
(7)     Onus to prove that the taxable goods held in the stock on the appointed day, has suffered tax under the repealed Act, shall be on the claimant of input tax credit.
(8)     Save as otherwise provided in this section, the provisions of section 13, shall apply mutatis mutandis to the input tax credit claimed under this section.

   Net tax payable by
   a taxable person.
 
15.    (1)     Subject to the provisions of this Act, the net tax payable by a taxable person for a tax period, shall be determined by deducting the amount of input tax credit available to him (including input tax credit carried forward from the preceding tax periods, if any) from the output tax, payable by him during the tax period.
(2)     If the amount of input tax credit, is more than the amount of output tax, the same may be adjusted, at the option of the taxable person, against the tax liability for the said tax period, if any, under the Central Sales Tax Act, 1956 and only the remaining amount of the Central Sales Tax shall be payable.
(3)     Excess amount of input tax credit, if any, after adjustment under sub-section (2) shall be adjusted against any outstanding tax, penalty or interest under this Act or under the Central Sales Tax Act, 1956, as the case may be.
(4)     Excess amount of input tax credit, if any, after adjustment under sub-section (2) and (3), may be carried over to subsequent tax period or at the option of taxable person, on application being made in the prescribed manner, be refunded in accordance with the provisions of this Act.
(5)     The net tax payable for a tax period by a person, liable to pay tax, but not registered under this Act, shall be equal to the output tax, payable for the said tax period as per the provisions of this Act and no input tax credit shall be admissible to him.
   Tax free
   goods.
 
 
16.    No tax shall be payable on the sale of goods specified in Schedule-A and no person including a taxable person or a registered person shall charge tax on the sale of goods which are declared tax free goods under this section.
   Zero-rated sales.
 
 
17.    Where any taxable goods are exported outside the territory of India or are supplied in the course of such export falling within the scope of section 5 of the Central Sales Tax Act, 1956, such sales shall be zero-rated. On such sale, no output tax is payable by any person:
Provided that a taxable person making zero-rated sale shall be eligible for input tax credit in relation to such sales.
   Refund of tax to certain categories.
 
 
18.    (1)          The persons or organizations listed in Schedule-G, shall be entitled to claim refund of tax, paid for goods, purchased in the State, on every single purchase, exceeding rupees five thousand, excluding tax amount, on proper application, subject to such conditions, as may be prescribed.
(2)     A taxable person shall be entitled to claim refund in respect of input tax paid on goods exported out of the territory of India, subject to such conditions and the manner, as may be prescribed.

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