LexThe ARUNACHAL PRADESH GOODS TAX ACT, 2005 (ACT NO. 3 OF 2005)
Arunachal Pradesh · state statute
Open in Lexace · Ask the AI about this actTHE ARUNACHAL PRADESH GOODS TAX ACT, 2005 (ACT NO. 3 OF 2005)
(Received the assent of the Governor on 10 th March, 2005) and published in the Arunachal
Pradesh E.O. Gazette No. 139, Vol. XIII dated 16th March, 2005).
1.As amended by Arunachal Pradesh Goods Tax Act, 2006 (Act no 7 of 2006) (Received
the assent of the Governor on 20th April, 2006 and published in the Arunachal Pradesh E.O.
Gazette No. 44, Vol. XIV dated 15th May. 2006).wef 15/05/2006
2.As amended by Arunachal Pradesh Goods Tax Act, 2006 (Act no 11 of 2006) (Received
the assent of the Governor on 6th December, 2006 and published in the Arunachal Pradesh E.O.
Gazette No. 107, Vol. XIV dated 15th December 2006). wef 13/06/2006
3.As amended by Arunachal Pradesh Goods Tax Act, 2007(Act no 3 of 2007) (Received
the assent of the Governor on 08th April, 2007 and published in the Arunachal Pradesh E.O.
Gazette No. 158, Vol. XIV dated 11th April 2007). wef 11/05/2007
4.As amended by Arunachal Pradesh Goods Tax Act, 2010(Act no 4 of 2010) (Received the
assent of the Governor on 20th April, 2010 and published in the Arunachal Pradesh E.O. Gazette
No. 37, Vol. XVII dated 5th May. 2010). wef 28/08/2009
AN
ACT
to levy consumption tax on goods consumed in the State of Arunachal Pradesh through a
combination of tax on entry of goods in local area of Arunachal Pradesh and value added sales tax
on the business in the State.
BE it enacted by the Legislative Assembly of Arunachal Pradesh in the Fifty-Sixth Year
of the Republic of India as follows:-
CHAPTER- I.
PRELIMINARY
1. Short title, extent and commencement
(1) This Act may be called the Arunachal Pradesh Goods Tax Act, 2005.
(2) It extends to the whole of the Arunachal Pradesh.
(3) It shall come into force on such date as the Government may, by notification i n the
Official Gazette, appoint.
Provided that different dates may be appointed for different provisions of this Act and
any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
(4) Upon coming into force of this Act, the Act applies to every sale of goods and the
import of goods into Arunachal Pradesh in the manner provided in Section 13.
2. Definitions
In this Act, unless the context otherwise requires:
(a) "Accou ntant" means -
(i) a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949;
(ii) a person who by virtue of the provisions of section 226(2) of the Companies Act, 1956,
is entitled to be appointed to act as an auditor of Companies registered; or
(iii) a person referred to in Section 619 of the Companies Act, 1956.
(b) "Appellate Tribunal" means the Appellate Tribunal constituted under section 74 of this
Act.
(c) "Approved Road Transporter" means an Approved Road Transporter as described
in Section 26.
(d) "Approved Warehouse" means a warehouse operated by a person permitted to do so
pursuant to Section 26.
(e) "adequate proof" means such documents, testimony or other evidence as may be
prescribed.
(f) "business" includes:
(i) the provision of such servic es, as may be prescribed (and excludes services
provided by an employee);
(ii) any trade, commerce or manufacture;
(iii) any adventure or concern in the nature of trade, commerce or manufacture;
(iv) any agricultural or horticultural activity to produce outputs taxable un der the Act.
(v) any transaction in connection with, or incidental or ancillary to, such trade,
commerce, manufacture, adventure or concern; and
(vi) any occasional transaction in the nature of such service, trade, commerce,
manufacture, adventure or concern w hether or not there is volume, frequency,
continuity or regularity of such transaction;
whether or not such service, trade, commerce, manufacture, adventure or concern is
carried on with a motive to make gain or profit and whether or not any gain or profit
accrues from such service, trade, commerce, manufacture, adventure or concern.
Explanation: For the purpose of this clause —
(i) any transaction of sale or purchase of capital assets pertaining to such service, trade,
commerce, manufacture, adventure or concern shall be deemed to be business.
(ii) purchase of any goods, the price of which is debited to the business and sale of any
goods, the proceeds of which are credited to the business shall be deemed to be
business.
(g) "business premises" means any building or place used by a person for the conduct of his
business, but does not include any building or the part of any building that is used
principally as a residence.
(h) "capital goods" means plant, machinery and equipment used in the process of business.
(i) "casual trader" means a person who, whether as principal, agent or in any other capacity
undertakes occasional transactions in the nature of business involving buying, selling,
supply or distribution of goods or conducting any exhibition-cum-sale in Arunachal
Pradesh whe ther for cash, deferred payment, commission, remuneration or other
valuable consideration.
(j) "Commissioner" means the Commissioner of Goods Tax.
(k) "in the course of" includes activities done for the purposes of, in connection with or
incidental to and includes activities done as part of the preparation for the activity and in the
termination of the activity.
(I) "dealer" means —
(i) many person who, for the purposes of or in connection with or incidental to or
in the course of his business buys, sells, supplies or distributes goods directly or
otherwise, whether for cash or for deferred payment or for commission,
remuneration or other valuable consideration;
(ii) each department of the Central Government or a State Government, a
local Authority, Panchayat, M unicipality, Development Authority,
Cantonment Board and each autonomous or statutory body or an
industrial, commercial, banking, insurance or trading undertaking whether or not
of the Central Government or any of the State Governments or of a local
authority, if it sells, supplies or distributes goods, in the course of specified
activities which may be prescribed from time to time;
(iii) a factor, commission agent, broker, del credere agent, or any other
mercantile agent by whatever name called, who carries on t he business of
buying, selling, supplying or distributing goods on behalf of any principal,
whether disclosed or not;
(iv) an agent of a non-resident (where such nonresident is a dealer under any other
sub-clause of this definition);
(v) local branch of a firm or company or association of persons, outside
Arunachal Pradesh (where such firm, company, association of
persons is a dealer under any other sub-clause of this definition);
(vi) a club, association, society, trust, or cooperative society, whether
incorporated or unincorporated, which buys goods from or sells
goods to its members for price, fee or subscription, whether
or not in the course of business;
(vii) an auctioneer, who sells or auctions goods belonging to any principal, whether
disclosed or not and whether the offer of the intending purchaser is accepted by him or
by the principal or a nominee of the principal;
(viii) a casual trader; or
(ix) any person who, for the purposes of or in connection with or incidental to or in the
course of his business disposes of any goods as unclaimed or confiscated, or
unserviceable or scrap, surplus, old, obsolete or as discarded material or waste
products by way of sale.
(m) "entry of goods into Arunachal Pradesh" means taking, receiving, bringing, carrying, transporting,
or causing to bring or receive goods into the local area of Arunachal Pradesh from any place outside
Arunachal Pradesh. In the case of goods arriving in Arunachal Pradesh from a foreign country
through Customs, the import of the goods occurs at the place where the goods are cleared by Customs
for home consumption.
(n) "fair market value" means the value at which goods of like kind and quality are sold or would be
sold in the same quantities between unrelated parties in the open market in Arunachal
Pradesh.
(o) "goods" means every kind of movable property (other than newspapers, actionable claims,
stocks, shares and securities) and includes:
(i) livestock, all materials, commodities, grass or things attached to or forming part of the
earth which are agreed to be severed before sale or under a contract of sale; and
(ii) property in goods (whether as goods or in some other form) involved in the
execution of a works contract, lease or hire -purchase or those to be used in the fitting
out, improvement or repair of movable property.
(p) "goods vehicle" means a motor vehicle, vessel, boat, animal, railway carriage, aircraft, and
any other form of conveyance used for carrying goods.
(q) "import" means causing entry of goods into local area of Arunachal Pradesh.
(r) "importer" means:
(i) a person who brings their own goods into Arunachal Pradesh; or
(ii) a person on whose behalf another person brings goods into Arunachal Pradesh; or
(iii) in the case of a sale occurring in the circumstances referred to in section 6(2) of the
Central Sales Tax Act, 1956 (74 of 1956), the person in Arunachal Pradesh to whom the
goods are delivered.
(s) "input tax" —
(i) in relation to the purchase of goods, means the proportion of the price paid by the buyer
for the goods which represents tax for which the selling dealer is liable;
(ii) in relation to an import of goods, means the amount of tax for which the importer is
liable under this Act in respect of the import.
(t) "Local area of Arunachal Pradesh" means the area falling within the jurisdiction of the State
of Arunachal Pradesh.
(u)"notified date" means the date notified by the Governor under sub-section (3) of Section 1.
(v) "net tax" means the amount calculated for a tax period under section 11 of this Act.
(w) "non-creditable goods" means the goods listed in the Seventh Schedule.
(x) "non-taxable import" means the goods listed in the Eighth Schedule.
(y) "non-resident" means a person who has no fixed place of business or residence in
Arunachal Pradesh.
(z) "notified" means notified by the Commissioner in the Official Gazette.
(za) "Official Gazette" means the Arunachal Pradesh Gazette.
(zb) "prescribed" means prescribed in the Rules made under this Act.
(zc) "registered dealer" means a dealer registered under this Act. •
(zd) a person is "related" to another person (referred to in this definition as a "dealer") if the
person:
(i) is a relative of the dealer:
(ii) is a partnership of which the dealer is a member, or a partner in that partnership;
(iii) is a company in which the dealer (either alone or in conjunction with another person
who is or persons who are related to the dealer under another paragraph of this
definition) directly or indirectly holds 40% or more of outstanding voting stock or
shares;
(iv) is a person who (either alone or in conjunction with another rson who is, or
other persons who are, related to the person under another paragraph of this definition)
directly or indirectly owns 40% or more of outstanding voting stock or shares of the
dealer;
(v) is a company in which 40% or more of outstanding voting stock is held directly or
indirectly by a person (either alone or in conjunction with another person who is, or other
persons who are, related to the person under another paragraph of this definition) who also
holds 40% or more of the outstanding voting stock or shares of the dealer; or
(vi) is controlled by the dealer, a person whom the dealer controls, or is a person who is
controlled by the same person who controls the dealer.
(ze) "relative" means a relative as defined in section 2(41) of the Companies Act, 1956.
(zf) "sale" with its grammatical variations and cognate expression means any transfer of property
in goods by one person to another for cash or for deferred payment or for other
valuable consideration (not including a grant or subvention payment paid by one
Government agency or department to another) and includes:
(i) a transfer of property in goods on hire purchase or other system of payment by
installments, but does not include a mortgage or hypothecation of or a charge or
pledge on goods;
(ii) supply of goods by a society (inc luding a co-operative society), club, firm, or any
Association to its members for cash or for deferred payment or for commission,
remuneration or other valuable consideration, whether or not in the course of
business;
(iii) transfer of property in goods by an auctioneer referred to in sub -clause (vii) of
clause (I) of this section, or sale of goods in the course of any other activity in the
nature of banking, insurance who in the course of their main activity also sell goods
repossessed or re-claimed;
(iv) transfer, otherwise than in pursuance of a contract, of property in any goods for cash,
deferred payment or other valuable consideration;
(v) transfer of property in goods (whether as goods or in some other form) involved in the
execution of a works contract;
(vi) transfer of the right to use any goods for any purpose (whether or not for a specified
period) for cash, deferred payment or other valuable consideration;
(vii) supply, by way of or as part of any service or in any other manner whatsoever, of
goods, being food or any other article for human consumption or any drink (whether or
not intoxicating), where such supply or service is for cash, deferred payment or other
valuable consideration;
(viii) every disposal of goods referred to in sub-clause (ix) of clause (I) of this section;
and the words "sell", "buy" and "purchase" wherever appearing with all their
grammatical variations and cognate expressions, shall be construed accordingly.
(zg) "sale price" means the amount paid or payable as valuable consideration for any sale,
including:
(a) the amount of tax if any for which the dealer is liable under section 3 of this Act;
(b) the amount of tax if any for which the dealer is liable under the Central Sales Tax Act,
1956 (74 of 1956);
(c) in relation to the delivery of goods on hire purchase or any system of payment
by installments, the amount of valuable consideration payable to a person
for such delivery including hire charges, interest and other charges incidental to such
transaction;
(d) in relation to transfer of the right to use any goods for any purpose (whether or not
for a specified period) the valuable consideration or hiring charges received or
receivable for such transfer;
(e) any sum charged for anything done by the dealer in respect of goods at the time of or
before the delivery thereof:,
(f) amount of duties levied or leviable on the goods under the Central Excise Act, .1944
or the Customs Act, 1962, or Arunachal Pradesh Excise Act, 1993 whether such
duties are payable by the seller or any other person; and
(g) amount received or receivable by the seller by way of deposit (whether refundable or
not) which has been received or is receivable whether by way of separate agreement or
not, in connection with or incidental to or ancillary to the sale of goods;
less:
(i) any sum allowed as discount which goes to reduce the sale price according to
the practice normally prevailing in trade;
(ii) the cost of freight or delivery or the cost of installation in cases where such cost
is separately charged,
and the words "purchase price" with all their grammatical variations and
cognate expressions, shall be construed accordingly.
Explanation : A dealer's sale price always includes the tax payable by it on making the
sale, if any.
(zh) "tax" means tax payable under this Act.
(zi) "taxable quantum" means the amount defined in section 19.
(zj) "tax invoice" means the documents defined in section 51.
(zk) "tax period" means the period prescribed in the rules.
(zI) "tax fraction" means the fraction calculated in accordance with formula,r / (r+100) where `r.'
is the percentage rate of tax applicable to the sale.
(zm) "transporter" means any person who, for the purposes of or in connection with or incidental
to or in the course of his business transports or causes to transport goods, and includes any person
whose business consists of o r includes operating a railway, shipping company, air cargo terminal,
inland container depot, container freight station, courier service, postal service or airline.
(zn) "turnover of purchases" means the aggregate of the amounts of purchase price paid or
payable by a person in any tax period, including any input tax.
(zo) "turnover" means the aggregate of the amounts of sale price received or receivable by the
person in any tax period, reduced by any tax for which the person is liable under section 3(1)(a) of
this Act.
(zp) "value of goods" means the fair market value of the goods at that time including insurance
charges, excise duties, countervailing duties, tax paid or payable under the Central Sales Tax Act,
1956 (74 of 1956) in respect of the sale, transport charges, freight charges and all other charges
incidental to the transaction of the goods.
(zq) "works contract" includes any agreement for carrying out for cash or for deferred payment or
for valuable consideration, the building construction, manufac ture, processing,
fabrication, erection, installation, fitting out, improvement, repair or commissioning of any
movable or immovable property.
(zr) "year" means the financial year from 1 April to 31 March.
(zs) "manufacture" with all its grammatical variations and cognate expressions, means producing,
making, extracting, altering, ornamenting, blending, finishing or otherwise processing, treating
or adopting any goods.
CHAPTER-II.
IMPOSITION OF TAX
3. Imposition of tax
(1) Imposition on persons wh o are dealers and importers. Subject to
other provisions of this Act, every person who is —
(a) a dealer and is —
(i) registered under this Act; or
(ii) required to be registered under this Act; or
(b) an importer of goods;
shall be liable to pay tax calculated in accordance with this Act,
at the time and in the manner provided in this Act.
(2) Imposed on sale and entry of goods. Every person who —
(a) is dealer, shall be liable to pay tax on every sale of goods effected
by him —
(i) while he is a registered dealer under this Act; and
(ii) on and from the day on which he was required to be registered under this Act;
(b) is an importer, shall be liable to pay tax on every entry effected by or for him of goods
for consumption, use or sale in local area of Arunachal Pr adesh other than a non -
taxable import.
(3) Amount of tax. The amount of tax payable under this Act by a person
(a) in respect of the sale of any goods, is the person's net tax for the tax period calculated
under section 11 of this Act; and
(b) in respect of the i mport of any goods, is the amount calculated by applying the rate
stipulated in section 4 to —
(I) the value of the goods at the time of their import into Arunachal Pradesh; or
(ii) in the case of the import of goods which had previously left Arunachal Pradesh for
repair, reengineering, reconditioning, assembly or processing, the value of any
goods purchased outside Arunachal Pradesh incorporated into the goods.
(4) Time at which payment of net tax is due. The net tax of a dealer shall be paid within
28 days of the conclusion of the dealer's tax period.
Explanation: The net tax of a dealer (which is the dealer's tax reduced by tax credits and
with adjustments) shall be paid at the same time as furnishing a return, but the obligation
to pay arises by virtue of this provision and is not dependent on furnishing a return, nor on the
issue of a notice of assessment to the dealer.
(5) Time at which payment of tax on entry of goods is due. The tax due on the entry of
goods shall be paid —
(a) except as provided in (b),
(i) if the goods enter Arunachal Pradesh in the possession of an Approved Road Transporter
and the conditions in sub-section (12) are satisfied, at the earlier of —
(A) the time at which the goods are delivered by the Approved Road Transporter
to another person, or
(B) 15 days after the goods are brought into Arunachal Pradesh;
(iii) if the goods enter Arunachal Pradesh in the possession of a transporter, by air or
rail, at the time that the goods are delivered by the transporter to another person in
Arunachal Pradesh;
(iii) if goods, which have been deposited directly into an Approved Warehouse inside
Arunachal Pradesh, are sold in Arunachal Pradesh or are delivered to a person in
Arunachal Pradesh, or are otherwise used or consumed in Arunachal Pradesh, at the
time of such sale, or removal, use or consumption whichever is the earliest; and
(iv) in any other case, when the goods are imported into Arunachal Pradesh;
(b)in the case of the import of a motor vehicle [excluding light motor vehicle including
three and two whellers for personal use] which is not registered in Arunachal Pradesh
under the Motor Vehicles Act, 1988, at the time that the motor vehicle is so registered.
[inserted by 2006 Amd Act (Act no 11 of 2006) s.2
**[(c) in the case of liquor (both imported or locally manufactured) tax shall be
levied at single point i.e., first point.]
[inserted by 2007 Amd Act (Act no 13 of 2007) s.2
(6) Manner of payment of tax. Tax shall be paid either:
(a) in the manner specified in section 38; or
(b) to an auth orised officer at a check -post established under section 102.
(7) Continuation of liability: Every dealer who has become liable to pay tax under this Act
on sales of goods shall continue to be so liable unless his taxable turnover during the prior twelve
months (and such further period as may be prescribed) has remained below the taxable quantum
and on the expiry of such further period his liability to pay tax shall cease.
Any dealer whose liability to pay tax under this Act ceases for any other reason may apply for
earlier the cancellation of his registration, and on such cancellation, his liability to pay tax shall
cease.
Provided that a dealer shall remain liable to pay tax until the date on which his
registration is cancelled.
(8) Re-commencement of liability : Every dealer whose liability to pay tax under this Act has
ceased or whose registration has been cancelled, shall, if his turnover calculated from the
commencement of any year, including the year in which the registration has been cancelled,
again exceeds the taxable quantum on any day within such year be liable to pay such tax on
and from the date on which his turnover again exceeds the taxable quantum, on all sales effected
by him on and after that day.
(9) Where it is found that any person registered as a d ealer ought not to have been so
registered, then notwithstanding anything contained in this Act, such person shall be liable to
pay tax for the period during which he was registered.
(10) For the purposes of this section, where goods are:
(a) imported into Aruna chal Pradesh;
(b) deposited directly into an Approved Warehouse inside Arunachal Pradesh; and
(c) the conditions in section 26(6) are satisfied;
the goods shall be deemed not to be for consumption, use or sale in Arunachal
Pradesh.
(11) Payment of tax by transport ers or agents: Any tax which has not been paid by an
importer may be paid by a transporter or other agent on the importer's behalf and where a
transporter or agent has made such a payment:
(a) it shall be treated for the purposes of this Act as a payment of tax made by the importer,
and
(b) is thereupon a debt owed by the importer to the transporter or agent.
(12) For the purposes of sub -section (5), the conditions with which an Approved Road
Transporter must comply are:
(a) the person must be an Approved Road Transporter at the time that
the goods are imported into Arunachal Pradesh and must carry and
produce on demand evidence of this status;
(b) the Approved Road Transporter must hold and produce on demand
documents in the prescribed form which describe in detail the goods,
the value of the goods and the identity of the recipient in
Arunachal Pradesh; and
(c) either the goods must be for delivery to a registered dealer in Arunachal Pradesh or
the Approved Road Transporter is a registered dealer.
(13) Presumption of ownership or importer. If any person who transports goods or
holds goods in custody for delivery to or on behalf of any person, on being required by the
Commissioner so to do, fails —
(a) to furnish any information in his possession in respect of the goods;
or
(b) fails to permit inspection thereof;
then without prejudice to any other action which may be taken against such person, a
presumption may be raised that the goods in respect of which he has failed to furnish
information or permit inspection,
(i) were imported by him on his own behalf; or
(ii) are owned by him and are held by him for sale in Arunachal Pradesh;
and the provisions of this Act shall apply accordingly.
4. Rates of tax
(1) The rates of tax payable under the Act shall be —
(a) in respect of goods specified in the Sec ond Schedule, at the rate of one paise in the
rupee;
(b) in respect of goods specified in the Third Schedule, at the rate of four paise in the
rupee;
(c) in respect of goods specified in the Fourth
Schedule, at the rate of twenty paise in the rupee;
(d) in the case of any other goods, at the rate of twelve and half paise in the rupee;
Provided that the rate of tax on packing materials or containers shall be the same as the rate
at which the goods sold are chargeable to tax.
(2) The Government may, if he deems it necess ary, reduce the rates of tax as prescribed in
subsection (1), by a notification to that effect in the Official Gazette.
5. Taxable turnover
(1) For the purposes of this Act, taxable turnover means that part of dealer's turnover
arising during the tax peri od which remains after deducting therefrom:
(a) the turnover of sales not subject to tax under section 7 of this Act; and
(b) the turnover of sales of goods declared exempt under section 6 of this Act.
(c) (2) In the case of turnover arising from the execution of a wo rks contract,
the amount included in taxable turnover is so much of the dealer's turnover from
the works contract as represents the charges towards goods, subject to such
conditions as may be prescribed.
(d) Provided that in the cases where the amount of charg es towards goods in
such contract is not ascertainable from the terms and conditions of the
contract, the amount of such charges shall be calculated as the sale price stipulated
in the contract reduced by the prescribed percentage.
6. Sales exempt from tax
(1) The sale or import of goods listed in the First Schedule shall be exempt from tax
subject to the conditions and exceptions set out therein.
(2) The dealers or class of dealers as may be notified and specified from time to time in
the fifth schedule shall be exempted from payment of tax on all sales of goods affected by
them subject to such condition as may be prescribed.
Explanation: This exemption does not extend to the import of any goods made by the
dealer.
(3) Exemption for goods used exclusively in making non-taxed sales. Where a dealer
sells goods that it has used since the time of purchase exclusively for purposes other than
making sales of goods, and has not claimed a tax credit in respect of those goods under
section 9, the sale of those goods shall be exempt from tax.
7. Certain sales not liable to tax
(1) Nothing contained in this Act or the rules made thereunder shall be deemed to
impose, or authorise, the imposition of tax on any sale of goods when such sale takes
place:
(a) in the course of inter-state trade or commerce; or
(b) outside Arunachal Pradesh; or
(c) in the course of import of the goods into or export of the goods out of the territory of
India.
Explanation 1: Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply
for determining whether or not a particular sale takes place in the manner indicated in clause
(a), clause (b) and clause (c) of this section.
Explanation 2: This section does not prohibit the levy of tax on the import of these goods.
(2) For the purposes of sub-section (1), a sale of goods made for foreign currency by a duty-
free store in the arrival or departure hall of the International airport terminal, shall be treated as a
sale made in the course of the export of goods out of the territory of India.
8. Adjustments to tax
(1) This section shall apply where, in relation to the sale of goods by any dealer —
(a) that sale has been cancelled;
(b) the nature of that sale has been fundamentally varied or altered;
(c) the previously agreed consideration for that sale has been altered by agreement with the
recipient, whether due to the offer of a discount or for any other reason;
(d) the goods or part of the goods sold have been returned to the dealer; or
(e) the whole or part of the price owed by. the buyer for the purchase of the goods has been
written-off by the dealer as a bad debt;
and the dealer has —
(i) provided a tax invoice in relation to that sale and the amount shown therein as tax
charged on that sale is not the tax properly chargeable on that sale; or
(ii) furnished a return in relation to a tax period in respect of which tax on that sale is
attributable, and has accounted for an amount of tax on that sale that is not the
amount properly chargeable on that sale.
(2) Where a dealer has accounted for an incorrect amount of tax as contemplated in sub -
section (1), that dealer shall make an adjustment in calculating the tax payable by that dealer in
the return for the tax period during which it has become apparent that the tax is incorrect, and
if —
(a) the tax payable in relat ion to that sale exceeds the tax actually accounted for by
the dealer, the amount of that excess shall be deemed to arise in the tax period in which
the adjustment is made, and shall not be attributable to any prior tax period; or
(b) the tax actually accounted for exceeds the tax payable in relation to the sale, the
amount of that deficiency shall be subtracted from the tax payable by the dealer in the tax
period in which the adjustment is made, and shall not be attributable to any prior tax
period.
(3) Adjustment to tax for goods used for mixed purposes: Where a dealer sells goods that
have been used in part for making:
(a) sales that are subject to tax under this Act or sales that are not liable to tax under
section 7; and
(b) partly for other purposes,
the amount of tax on the sale of the goods shall be the greater of:
(i) A — (A x B / C); or
(ii) A — B.
Where:
A =The tax for which the dealer would be liable in
respect of the sale apart from this section.
B =The amount by which the tax credit of the dealer
in respect of the goods was reduced under section 9(3).
C =The amount of the tax credi t
9. Tax credit
(1) Entitlement to tax credit. Subject to sub section (2), a dealer who is registered or is
required to be registered shall be entitled to a tax credit on the turnover of purchases arising during
the tax period and for all imports of goods made during the tax period in the course of his activities
as a dealer which are to be used directly or indirectly by him for the purpose of making:
(a) sales which are liable to tax under section 3 of this Act; and
(b) sales which are not liable to tax under section 7.
Explanation. Sales which are not liable to tax under section 7 involve exports from Arunachal
Pradesh whether to other States or Union Territories, or to foreign countries.
(2) No tax credit shall be allowed —
(a) in the case of the purchase of goods, for goods purchased from a person who is not a registered
dealer;
(b) for the purchase or import of non-creditable goods;
(c) for the purchase or import of goods which are to be incorporated into the structure of a building;
(d) for goods purchased from a registered dealer who has elected to use a simplified accounting
method; or
(e) to the dealers or class of dealers specified in the Fifth Schedule.
(3) Amount of tax credit. The amount of the tax credit to which a dealer is entitled in respect
of the purchase or import of goods and for which a credit is allowed under sub-section (1) is the amount
of input tax arising in the tax period reduced in the manner described in sub-sections (4) and (6).
(4) Where a dealer has purchased or imported goods and the goods are to be used partly for
the purpose of making the sales referred to in sub-section (1) and partly for other purposes, the
amount of the tax credit shall be reduced proportionately.
(5) The method used by a dealer to determine the extent to which the goods are used in the
manner specified in sub-section (4), shall be fair and reasonable in the circumstances. The
Commissioner may:
(a) prescribe methods for calculating the amount of tax credit or the amount of any
adjustment or reduction of a tax credit in certain instances; and
(b) after giving reasons in writing, reject the method adopted by the dealer and calculate the
amount of tax credit.
Explanation : A person may object in the manner referred to in section 75 to a
decision of the Commissioner to reject a method of calculating a tax credit.
(6) Where—
(a) a dealer has purchased or imported goods for which a tax credit arises under sub-section
(1);
(b) the goods are to be exported from Arunachal Pradesh by way of transfer to a —
(i) non-resident consignment agent; or
(ii) non-resident branch of the dealer; and
(c) the transfer will not be by way of a sale made in Arunachal Pradesh;
the amount of the tax credit shall be reduced by the prescribed percentage.
(7) For the removal of doubt, no tax credit shall be allowed for:
(a) purchases of goods from an unregistered dealer;
(b) purchases of goods made in the course of interstate trade and commerce; or
(c) purchases or imports of goods which are used exclusively for the manufacture, processing or
packing of goods specified in the First Schedule.
(8) Time for claiming tax credit. The tax credit may be claimed by a dealer only if the dealer
holds a tax invoice at the time that the prescribed return for the tax period is furnished.
10. Adjustment to tax credit
(1) Adjustment to tax credit for change of price, etc. Where any purchaser has been issued
with a credit note or debit note in terms of section 52 or if he returns or rejects goods purchased, as a
consequence of which, the tax credit claimed by him in any tax period in respect of which the purchase
of goods relates, becomes short or excess, he shall compensate such short or excess by adjusting the
amount of the tax credit allowed to him in respect of the tax period in which the credit note or debit
note has been issued or goods are returned.
(2) Adjustment to tax credit for change of use, etc. If goods which have been purchased or
imported were:
(a) intended to be used for the purposes specified under section 9(1) and are
subsequently used, fully or partly, for purposes other than those specified under the said
sub-section, or
(b) intended for purposes other than those specified under section 9(1), and are
subsequently used, fully or partly, for the purposes specified in the said sub-section, or
the tax credit claimed in respect of such purchase import shall be reduced or increased (as the case may
be) for the tax period during which the said utilization otherwise has taken place.
(3) Where—
(a) goods were purchased or imported by a dealer,
(b) the dealer claimed a tax credit in respect of the goods, and did not reduce the tax credit by
the prescribed percentage; and
(c) the goods are exported from Arunachal Pradesh, other than by way of a sale, to a branch of
the registered dealer or to a consi gnment agent, the dealer shall reduce the amount of tax
credit originally claimed by the prescribed proportion.
(4) If goods which have been purchased or imported by a dealer were —
(a) intended to be used for the purposes specified under section 9(1), and
are subsequently incorporated into the structure of a building, the tax credit claimed in respect of
such purchase or import shall be reduced in the tax period during which such incorporation
takes place.
11. Net tax
(1) The net tax payable by a dealer for a tax period shall be determined by the formula:
Net Tax = 0 — I — C
Where:
0= the amount of tax payable by the person at the rates stipulated in section 5 in respect of the
taxable turnover arising in the tax period, adjus ted to take into account any adjustments to
the tax payable required by section 8.
I = the amount of the tax credit arising in the tax period to which the person is entitled under
section 9, adjusted to take into account any adjustments to the tax credit r equired by
section 10.
C= the amount, if any, brought forward from the previous tax period under sub-section (2).
(2) Where the net tax of a dealer calculated under sub-section (1) is a negative value, the
dealer shall be entitled to claim a refund of the amount and the Commissioner shall
deal with the refund claim in the manner described in section 40.
Explanation: The Commissioner shall be entitled to apply the refund against other amounts
owed under this Act and the Central Sales Tax Act, to withhold the refund in certain cases and
to seek security for a cash refund. The dealer may elect to apply the refund as a tax credit in
the next tax period.
12. Time at which turnover, turnover of purchases and adjustments arise
(1) Subject to sub-sections (2), (3) and (4), the amount of the turnover and the turnover of
purchases of a dealer which arises during any tax period shall be the amount recorded in the
accounts of the dealer where those accounts are regularly and systematically prepared and
maintained, give a true and fair view of the taxpayer's dealings, and are employed by the dealer in
determining the turnover of the dealer's business for commercial or income tax purposes.
(2) The Commissioner may by notification —
(a) permit certain classes of dealer to record turnover based on amounts paid or received; and
(b) require certain classes of dealer to record turnover based on amounts payable or
receivable.
(3) Where a dealer wishes to change the method of determining the turnover and turnover
of purchases, he may only make the change with the consent of the Commissioner and on
such terms and conditions as the Commissioner may impose.
(4) The Commissioner may by notification prescribe the time at which a dealer shall treat
the —
(a) turnover;
(b) turnover of purchases ; and
(c) adjustment of tax or adjustment to a tax credit; as arising for a class of transaction.
13. Application to sales, purchases and imports
(1) The tax imposed by section 3 applies to every:
(a) sale, including an installment sale and hire purchase of goods, made on and after the
notified date;
(b) sale in the form of the transfer of a right to use goods, to the extent that the right to use
goods is exercised after the notified date; and
(c) import of goods into Arunachal Pradesh made on and after the notified date.
(2) Tax credits arising under section 9 shall be allowed only for —
(a) a purchase, including a purchase under an installment sale and hire purchase of goods,
made on and after the notified date;
(b) a purchase occurring in the form of the acquisition of a right to use goods, to the
extent that the right to use goods is exercised after the notified date; and
(c) the import of goods into Arunachal Pradesh made on and after the notified date.
Explanation : This provision does not prevent the person claiming the special tax credit
allowed under section 15.
(4) Where an amount is paid or received prior to the notified date in respect of a sale or
purchase occurring after the notified date, and the person calculates his turnover or
turnover of purchases based on amounts paid and received, the amount shall be treated as
forming part of the person's turnover or turnover of purchases in the tax period in which
the sale occurs.
CHAPTER III .
SPECIAL REGIMES
14. Priority
Where a provision in this Chapter is inconsistent with a provision in Chapter Il, the p rovision
in this Chapter shall, to the extent of the inconsistency, prevail.
15. Treatment of stock brought forward during transition
(1) Deemed input credit. Within a period of four months of commencem ent of this Act, all
registered dealers wishing to claim the credit referred to in sub - section (2), shall furnish to
the Commissi oner a statement of their t rading stock, raw materials and packaging materials
for trading stock (in this section referred to as “opening stock”) which —
(a) is held on the date of commencement of this Act;
(b) is in Arunachal Pradesh on the date of commencement of this Act; and
(C) was purchased by the dealer after 1 April 2004; in such form as may be prescribed.
(2) lf-
(a) the dealer has f urnished the st atement referred to in sub -section (1);
(b) the opening stock has suffered tax under the Arunachal Pradesh Sales Tax Act 1999 at
the point specified by the Government under section 5 of the said Act; and
(C) if the opening stock had been purchased by the dealer after th e commencement of this
Act from another registered dealer, the dealer would have been entitled to a tax credit under
section 9(1), the amount of tax suffered under the Arunachal Pradesh Sal es Tax Act 1999 on
such opening stock, determ ined in such manner and subject to such conditions and
restrictions and up to the extent as may be prescribed, shall be credited to the registered
dealer as if a tax credit under section 9;
Provided that no tax credit under this section shall be allowed unless the dealer has In his
possession, invoices issued by a dealer registered under the Arunach al Pradesh Sales Tax
Act 1999 in respect of the purchases of the said goods;
Provided further that the dealer must claim the entire amount of credit to which he is entit led
in a single statement, which accompanies a return furnished under this Act.
(3) For the avoidanc e of doubt, no tax credit under sub-section (2) can be claimed:
(a) for finished goods or capital goods;
(b) for any goods that were taxable at last point under the Arunachal Pradesh Sales Tax Act
1999 held at the time of commencement of this Act;
(c) in a statement furnished more than 4 months after the commencement of this Act; or
(d) for opening stock which is held outside Arunachal Pradesh.
(4) Audit cert ificate. Every dealer wishing to claim a tax credit for opening stock in exce ss
of Rupees one hun dred thousand must furnish with the state ment a certificate signed by an
Accountant in the prescribed form certifying that the net refund claim made is true an d
correct.
(5) Tax on transition stock. Notwithstanding section 3, if —
(a) a person was registered as a dealer under the Arunachal Pra desh Sales Tax Act, 1999
(Act 5 of 1999); |
(b) the person is n ot registered as a dealer under this Act pursuan t to secti on 25, and the
person has not appli ed to be registered as a dealer within one mo nth of the date of
commencement of this Act; and
(c) on the date of commencement of this Act, the dealer held opening stock or finished goods
which had not s uffered tax under t he Arunachal Pradesh Sales Tax Act 1999; and the person
shall be liable to pay tax under this Act at the rates specified in sec tion 4 on the fair market
value of the opening stock h eld on the date of commencement of this Act.
*[(6) The tax due under sub -section (5) shall be paid in four equal instalments, alongwith the
quarterly returns. The dealers are allowed to avail credit of tax paid on Opening Stock in the
corresponding four quarters.]
*[Substituted by 2006 Amd Act (Act no 7 of 2006)s.2
16. Second -hand goods
(1) This section applies where —
(a) aregistered dealer sells second -hand goods;
(b) the dealer has purchased goods from a resident seller who was not registered under this
Act;
(c) the goods were purchased either as trading stock for re-sale in an unmodified form, or as
raw materials for incorpo ration or division into trading stock;
(d) the dealer will be liable to tax under section 3 on the sale of the goods or the goods into
which they were incorporated as the cExcerpt shown. Open the full act in Lexace.