CHAPTER – II
Incidence of tax.
INCIDENCE AND LEVY OF TAX
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Incidence of tax.
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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 –
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(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.
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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.
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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.
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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.
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(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.
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(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.
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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.
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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.
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(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.
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(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.
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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.
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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.
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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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