LexThe CHHATTISGARH COMMERCIAL TAX ACT 1994
Chhattisgarh · state statute
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M.P. Commercial Tax Act, 1994
1(M. P. Act No. 5 of 1995)
An Act to levy tax on commerce in the State of Madhya Pradesh.
Be it enacted by the Madhya Pradesh Legisl ature in the Forty Fifth year of the
Republic of India as follows :
Sec. 1 : Short title, extent & commencement
(1) This Act may be called the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994.
(2) It extends to the whole of Madhya Pradesh.
2(3) It shall come into force on 3such date as the State Government may by
notification in the Official Gazette appoint and different dates may be appointed for
different provisions of the Act.
Sec. 2 : Definitions
In this Act, unless there is anything repugnant in the subject or context -
(a) Appellate Deputy Commissioner means an Appellate Deputy Commissioner of
Commercial Tax appointed under Section 3 and includes an Additional Appellate
Deputy Commissioner of Commercial Tax;
(b) Assistant Commissioner means an Assistant Commissioner of Commercial Tax
appointed under Section 3;
(c) Business includes -
(a) any trade, commerce, manufacture or an y adventure or concern in the nature
of trade, commerce or manufacture, wh ether or not such 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 trade, commerce,
manufacture, adventure or concern and irrespective of the volume, frequency,
continuity or regularity of such trade, co mmerce, manufacture, adventure or concern;
1 Received the assent of the President on the 7.1.95; Assent first published in the Madhya
Pradesh Rajpatra dt. 7.2.95. Corrigendum da ted 15.11.96 published in the Madhya Pradesh
Rajpatra Part - 4 of 13.12.96. The Act has come into force w.e.f. 1.4.95.
The Act has been amended by the following Amending Acts/Ordinances :
1) MPCT (Amendment) Ordinance, 1995;
2) MPCT (Amendment) Act, 1995;
3) MPCT (Second Amendment) Act, 1996;
4) MPCT (Amendment) Act, 1997;
5) MPCT (Amendment) Ordinance, 1997;
6) MPCT (Second Amendment) Act, 1997;
7) MPCT (Amendment) Act, 1998;
8) MPCT (Amendment) Act, 1999;
9) MPCT (Second Amendment) Ordinance, 1999 (Read with corrigendum dated 28.1.00);
10) MPCT (Amendment) Act, 2000 (R ead with corrigendum dated 2.3.01);
2 Sub-section (3) substituted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.94.
3 The Act has come into force w.e.f. 1.4.95 vide Noti. No. 9, dt. 2.3.95.
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and
(b) any transaction of sale or purchase of goods in connection with or incidental
or ancillary to the trade, commerce, manufact ure, adventure or concern referred to in
sub-clause (a), that is to say -
(i) goods of the description referred to in sub-section (3) of Section 8 of the
Central Sales Tax Act, 1956 (No. 74 of 1956), whether or not they are
specified in the registration certificate, if any, of the dealer under the said Act
and whether or not they are in their original form or in the form of second
hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or
waste material; and
(ii) goods which are obtained as waste products or by-products in the course of
manufacture or processing of other goods or mining or generation of or
distribution of electrical energy or any other form of power;
(d) Commerce means sale or purchase of goods with in the meaning of clause (29-A)
of Article 366 of the Constitution of India and the expression “Commercial” shall be
construed accordingly;
1[(dd) 'Commercial Tax Office' means an office of any officer appointed under
section 3 of this Act.]
(e) Commercial Tax Officer means a Commercial Tax Officer appointed under
Section 3 and includes an Additional Commercial Tax Officer;
(f) Commissioner means the Commissioner of Commercial Tax appointed under
Section 3;
(g) Cooked food includes sweets and sweetmeats, mishri, batasha, chironji,
shrikhand, rabadi, doodhpak, prepared tea and prepared coffee but excludes ice-
cream, kulfi, ice-candy, non-alcoholic dri nk containing ice-cream, cakes, pastries,
biscuits, chocolates, toffees, lozenges, peppermint drops and mawa;
(h) Dealer means any person who carries on the business of buying, selling,
supplying or distributing goods, directly or otherwise, whether for cash, or for
deferred payment or for commission, remuneration or other valuable consideration
and includes -
(i) a local authority, a company, an undivided Hindu family or any society
(including a co-operative society), club, firm or association which carries on
such business;
(ii) a society (including a co-operative society), club, firm or association which
buys goods from, or sells, supplies or distributes goods to, its members;
(iii) a commission agent, broker, a del-credere agent, an auctioneer or any other
mercantile agent, by whatever name called, who carries on the business of
buying, selling, supplying or distributing goods on behalf of the principal;
1(iv) any person who transfers the right to use any goods for any purpose, (whether
or not for a specified period) in the course of business to any other person;
Explanation - (I) Every person who acts as an agent of a non-resident dealer, that is
as an agent on behalf of a dealer residing outside the State and buys, sells, supplies or
1 Inserted vide MPCT (Amendment) Act. 2002 w.e.f. 13-8-2002
1 Clause (iv) inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95.
distributes goods in the State or acts on behalf of such dealer as -
(i) a m ercantile agent as defined in the Indian Sale of Goods Act, 1930 (III of
1930); or
(ii) an agent for handling goods or documents of title relating to goods; or
(iii) an agent for the collection or the pay ment of the sale price of goods or as a
guarantor for such collection or payment, and every local branch of a firm or
company situated outside the State,
shall be deemed to be a dealer for the purpose of this Act.
(II) The Central or a State G overnment or any of their departments or offices
which, whether or not in the course of business, buy, sell, supply or distribute goods,
directly or otherw ise, for cash or for deferred pay ment, or for commission,
remuneration or for other valuable consideration, shall be deem ed to be a dealer for
the purpose of this Act.
(i) The expression declared goods shall have the m eaning assigned to it in the
Central Sales Tax Act, 1956 (No.74 of 1956);
(j) Deputy Commissioner means a D eputy Com missioner of Com mercial Tax
appointed under Section 3 and includes an Additional Deputy Com missioner of
Commercial Tax;
(k) Goods means all kinds of m ovable property other than actionable claim s,
newspapers, stocks, shares, securities or Governm ent stam ps and includes all
materials, articles and com modities, whether or not to be used in the construction,
fitting out, im provement or repair of m ovable or im movable property , and also
includes all growing crops, grass, trees, plants and things attached to, or form ing part
of the land w hich are agreed to be severed before the sale or under the contract of
sale;
(l) Import means the bringing or causing to be brought of goods into the State of
Madhya Pradesh from any place outside the State;
(m) Incidental goods means goods, other than raw m aterial and packing m aterial,
referred to in clause (b) of sub-section (3) of Section 8 of the Central Sales Tax Act,
1956 (N o.74 of 1956), for use by the registered dealer in the m anufacture or
processing of goods or in m ining of or in the generation or distribution of electrical
energy or any other form of power;
(n) Licence means a licence granted under the Act;
(o) Manufacture includes any process or m anner of producing, collecting,
extracting, preparing or m aking any goods, but does not include such m anufacture or
manufacturing process as may be 1notified.
(p) Place of business means any place where a dealer purchases or sells any goods or
stores goods or keeps accounts of his purchases or sales or both and also includes -
(i) the place of business of an agent where a dealer carries on business through an
agent;
(ii) any place or building whether any business is carried on therein or not, in which
the person carrying on the business, states that any of his books of accounts,
documents, stocks or other things, relating to his business are kept;
(q) Purchase price shall comprise of -
(i) the amount payable by a dealer as valu able consideration for the purchase of
goods ‘simpliciter’:
Provided that where goods are purchased together w ith the packing m aterial
or container, then notwithstanding any thing contained in this A ct, the
purchase price of such goods shall be inclusive of the price or cost or value of
such packing material or container, whether such price or cost or value is paid
separately or not as if such packing m aterial or container w ere the goods
purchased;
1 See Noti. No. 18, dt. 1.4.95.
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(ii) transport costs, if any;
(iii) trade commission, if any, by whatever name called;
(iv) forwarding and handling charges, if any;
(v) insurance charges, if any;
(vi) local taxes, if any;
(vii) excise duty, if any, leviable under the Central Excise and Salt Act, 1944 (No.1
of 1944);
(viii) cost of packing, if any; and
(ix) any other charges or costs other than t hose specified above, if incurred or paid
in respect of goods so purchased;
Explanation - For the purpose of this clause “transport cost” includes such
expenses as are incurred by the dealer on transportation of goods after taking delivery
from the seller;
(r) Raw material means an article used as an i ngredient in any manufactured goods,
or an article consumed in the process of manufacture and includes fuel and lubricants
required for the process of manufacture;
(s) Registered dealer means a dealer registered under this Act;
(t) Sale with all its grammatical variations and cognate expressions means any
transfer of property in goods for cash or deferred payment or for other valuable
consideration and includes -
(i) a transfer, otherwise than in pursuance of a contract, of property in any goods
for cash, deferred payment or other valuable consideration;
(ii) a transfer of property in goods whet her as goods or in some other form,
involved in the execution of a works contract;
(iii) a delivery of goods on hire purchase or an y system of payment by instalments;
(iv) a supply of goods by any unincorporated association or body of persons to a
member thereof for cash, deferred payment or other valuable consideration;
(v) a 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;
and such transfer, delivery or supply of any goods shall be deemed to be a sale
of those goods by the person making th e transfer, delivery or supply and
purchase of these goods by the person to whom such transfer, delivery or
supply is made, 1[but does not include a mortgage, hypothecation, charge or
pledge];
2(vi) a 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;
Explanation - (a) Notwithstanding anything contained in the Sale of Goods Act,
1930 (III of 1930), where a sale or purchase of goods takes place in pursuance of a
contract of sale, such sale or purchase sha ll be deemed, for the purposes of this Act to
have taken place in the State wherever the contract of sale or purchase might have
1 Subs. vide MPCT (Second Amendm ent) Act, 1996 w.e.f. 1.4.95.
2 Sub-clause (vi) inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95.
been made, if the goods are within the State -
(i) in the case of specific or ascertained goods , at the tim e the contract of sale or
purchase is made; and
(ii) in the case of unascertained or future goods, at the time of their appropriation to
the contract of sale or purchase by the seller or by the purchaser, whether the
assent of the other party is prior or subsequent to such appropriation; and
(b) Where there is a single contract of sale or purchase of goods situated at m ore
places than one, the provisions of clause (a ) shall apply as if there were separate
contracts in respect of the goods at each of such places.
(u) Sale price means the am ount payable to a dealer as valuable consideration
for the sale of any goods less any sum allowed as cash discount according to ordinary
trade practice but inclusive of any sum charged for anything done by the dealer in
respect of the goods at the tim e of or before delivery thereof other than the cost of
freight or delivery or the cost of installation when such cost is separately charged;
Explanation - Where goods are sold on hire purchas e or any system of pay ment by
instalments, the sale price of such goods shall be exclusive of insurance charges,
interest and hire charges and such other charges as may be prescribed;
(v) Tax means the tax payable under this Act;
(w) Taxable turnover in relation to any period means that part of a dealer’s turnover
for such period which remains after deducting therefrom -
(i) the sale price of goods declared tax fr ee under Section 15 or exempted in whole
under Section 17;
(ii) the sale price of goods m entioned in 1[Part II to VI] of Schedule II which are in
the nature of tax paid goods in the hands of such dealer;
(iii) the sale price of unginned cotton as specified in Part I of Schedule II and such
other goods in the said Part as the State Government may from time to time, by
notification, specify, sold to a regist ered dealer who has declared in the
prescribed form that the goods are for resale or for use by him in the
manufacture of goods for sale by him;
(iv) the sale price of goods specified in Part I of Schedule II other than those
referred to in sub-clause (iii), sold to a registered dealer who has declared in the
prescribed form that the goods are for resale by him;
(v) the amount arrived at by applying the following formula :
rate of tax X aggregate of sale prices
100 + rate of tax
Provided that no deductions on the basis of the above form ula shall be m ade if
the amount by way of tax collected by a registered dealer, in accordance with
the provisions of this A ct, has been otherwise deducted from the aggregate of
sale prices.
Explanation - Where the turnover of a dealer is taxable at different rates, the
aforesaid form ula shall be applied separately in respect of such part of the
turnover liable to a different rate of tax under sub-section (1) of Section 9;
(vi) such other deductions as may be prescribed.
Relevant Rules & Forms : Rules 26 & 35; Forms 26, 27, 28, 29, 30 & 31
(x) Tax paid goods in relation to a dealer m eans any goods specified in 2[Part II to
VI] of Schedule II which have been purchased by such dealer from a registered dealer
inside the State of Madhya Pradesh within the meaning of Section 4 of the Central
Sales Tax Act, 1956 (No.74 of 1956) except -
1 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f.
1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000.
2 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f.
1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000.
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(i) the goods sale whereof by such registered dealer is exempted in whole from
payment of tax subject to the condition that such exemption is available only to
such registered dealer; and
(ii) the goods manufactured by a registered dealer in his new industrial unit in
respect of which such dealer is availing of the facility of exemption from
payment of tax in whole under any notification issued under the Act repealed
by this Act or under this Act in pursuance of any scheme of the State
Government formulated and enforced befo re or after the commencement of this
Act for grant of incentives for the estab lishment of new industrial units in the
State;
(y) Tribunal means tribunal as constituted under Section 4;
(z) Turnover used in relation to any period means the aggregate of the amount of
sale prices received and receivable by a deal er in respect of any sale or supply or
distribution of goods made during that period, whether or not the whole or any
portion of such turnover is liable to tax but after deducting the amount, if any,
refunded by the dealer to a purchaser, in respect of any goods purchased and returned
by the purchaser within the prescribed period :
Provided that -
(i) in the case of sale by bonafide agriculturist as defined in clause (e) of sub-
section (1) of Section 2 of the Madhya Pradesh Land Revenue Code, 1959
(No.20 of 1959), of ghee produced by himself; or
(ii) in case of sale by a person of agri cultural or horticultural produce grown by
himself or grown on any land in which he has an interest whether as owner,
usufructuary mortgagee, tenant or otherwise, when such produce is sold in the
form in which it was produced, without being subjected to any physical,
chemical or other process for being made fit for consumption save mere
dehusking, cleaning, grading or sorting,
the amount of consideration relating to such sales shall be excluded from his
turnover;
1Explanation - The amount realised or realisable under Section 9-A shall be included
in the turnover.
Relevant Rule : Rule 36
(zz) Year means the twelve months ending on the 31st day of March.
Sec. 3 : Taxing Authorities and other Officers
(1) There may be appointed a person to be the Commissioner of Commercial Tax and
the following category of officers to assist him, namely :
(a) Additional Commissioner of Commercial Tax;
(b) Appellate Deputy Commissioner or Additional Appellate Deputy
Commissioner of Commercial Tax;
(c) Deputy Commissioner or Additional Deputy Commissioner of Commercial
Tax;
(d) Assistant Commissioner or Additional Assistant Commissioner of
1 Explanation inserted by MPCT (A mendment) Act, 1995 w.e.f. 1.4.95.
Commercial Tax;
(e) Commercial Tax Officer or Additional Commercial Tax Officer;
(f) Assistant Commercial Tax Officer; and
(g) Inspector of Commercial Tax.
(2) The Com missioner of Com mercial Tax and the A dditional Com missioner of
Commercial Tax shall be appointed by the State G overnment and the other officer
referred to in sub-section (1) shall be appointed by the State G overnment or such
other authority as it may direct.
(3) The Com missioner of Com mercial Tax and the A dditional Com missioner of
Commercial Tax shall exercise all the powers and perform all the duties conferred or
imposed on the Com missioner by or under this Act, throughout the State and for this
purpose any reference to the Com missioner in this A ct, shall be construed as a
reference to the Additional Commissioner of Commercial Tax.
(4) Other Officers referred to in sub-secti on (2) shall, within such areas as the
appointing authority may, by general or special order specify, exercise such powers as
may be conferred and perform such duties as may be imposed by or under this Act.
Relevant Rule : Rule 3
Sec. 4 : Tribunal
(1) Subject to such rules as m ay be m ade in this behalf, the State G overnment may,
by notification, with effect from a date specified therein, constitute Tribunal to
exercise the powers and perform the functions conferred on the Tribunal by or under
this Act.
(2) Till the date specified in the notification under sub-section (1), the Board of
Revenue shall act as Tribunal for the purpose of this Act and on the date
aforementioned all proceedings pending before the Board of Revenue, Madhya
Pradesh, acting as Tribunal shall stand tr ansferred to the Tribunal constituted under
sub-section (1).
(3) Subject to the previous approval of the State Government, the Tribunal may, from
time to time, make regulations consistent w ith the provisions of this A ct regulating
the procedure and disposal of its business.
Relevant Rule : Rule 4
Sec. 5 : Incidence of taxation
(1) Every dealer whose turnover during a period of tw elve m onths im mediately
preceding the com mencement of this Act exceeds the limit specified in sub-section
(5), shall from such com mencement be liable to pay tax under this Act in respect of
sales or supplies of goods effected in Madhya Pradesh.
(2) Every dealer to w hom sub-section (1) does not apply shall be liable to pay tax
under this Act in respect of sales or s upplies of goods effected in Madhy a Pradesh
with effect from the date on which his turnover in a y ear first exceeds the limit
specified in sub-section (5) but for the purpose of assessm ent of the tax only so much
of his turnover as is in excess of such limit, shall be taken into consideration.
(3) Every dealer who is liable to pay tax under this A ct shall continue to be so liable
until the expiry of two consecutive y ears during each of which his turnover has not
exceeded the lim its specified in sub-secti on (5) and till such further period thereafter
as may be prescribed and on the expiry of this later period his liability to pay tax shall
cease.
(4) Every dealer whose liability to pay tax under this Act has ceased under sub-
section (3) shall, if his turnover calculated from the commencement of any year again
exceeds the lim it specified in sub-section (5), be liable to pay tax under sub-section
(2).
(5) For the purpose of this Section, the limit shall be -
(a) in relation to a dealer w ho im ports into the State goods other than lottery
tickets of the value of not less than Rs.5, 000/- in a year - Fifty Thousand
Rupees;
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(b) in relation to a dealer who manufactures in a year any goods (other than such
goods as may be 1notified by the State Government in this behalf) of the
value not less than Rs.20, 000 - Fifty Thousand Rupees.
(c) in relation to a dealer being a co-operative society registered under any law
for the time being in force relating to co-operative societies dealing
exclusively in goods produced or manuf actured by such society or its
members without the aid of hired labour - One Lac Rupees.
(d) in relation to a dealer who enters into a works contract and in the execution
thereof supplies goods (whether as goods or in some other form) - One Lac
Rupees.
(e) in relation to a dealer not falling in clause (a), (b), (c) or (d) - One Lac
Rupees.
2(f) in relation to a dealer liable to pay tax under Section 9-A - Fifty Thousand
Rupees.
Sec. 6 : Determination of liability to pay tax under this Act
(1) The Commissioner shall, in the prescribed manner, institute proceedings for the
purpose of determining the liability of a dealer to pay tax under this Act. Such
liability shall be determined by an order and such determination shall be made within
a period of twelve months from the date of institution of such proceedings.
(2) Notwithstanding anything contained in sub- section (2) of Section 5, liability of a
dealer to pay tax under this Act shall not be determined from a date earlier than five
years prior to -
(i) the date of institution of pro ceedings under sub-section (1); or
(ii) the date of validity of the registration certificate, whichever is earlier.
Relevant Rule & Form : Rule 69; Form 56 & 57
Sec. 7 : Joint and several liability of a contractor or a sub-contractor
(1) Where a dealer who carries on the busin ess of supplying goods in the course of
execution of works contract entered into by him (hereinafter referred to as a
contractor) through another such dealer (her einafter referred to as a sub-contractor)
directly or otherwise, and the sub-contractor executes such works contract and each
or either of them is liable to pay tax under this Act, then notwithstanding anything
contained in this Act, the contractor and the sub-contractor shall be jointly and
severally liable to pay tax in respect of
3[transfer of property in goods whether as
goods or in some other form involved in the execution of such works contract].
(2) If the contractor proves in the prescribed manner that the tax has been paid by the
sub-contractor on the turnove r of goods supplied in the course of execution of the
works contract, the contractor shall not be liable to pay tax again on the turnover of
such goods.
(3) If the sub-contractor proves in the prescribed manner that the tax has actually
been paid by the contractor on the tur nover of goods supplied in the course of
1 See Noti. No. 19, dt. 1.4.95.
2 Clause (f) inserted by MPCT (A mendment) Act, 1995 w.e.f. 1.4.95.
3 Subs. by MPCT (Second Amendm ent) Act, 1996 w.e.f. 1.4.95.
execution of the works contract, the sub-contractor shall not be liable to pay tax again
on the turnover of such goods.
(4) Deduction in respect of the turnover of goods supplied in the course of execution
of works contract referred to in sub-section (2) or sub-section (3) shall be allow ed to
the contractor or to the sub-contractor on the production of proof required to be
furnished under the said sub-section.
Sec. 8 : Liability of a dealer registered under Central Act No. 74 of 6 to pay tax
(1) A dealer registered under the Central Sales Tax Act, 1956 (No.74 of 1956) who is
not liable to pay tax under Section 5 shall nevertheless be liable to pay tax on his
sales of any goods in respect of the purchases of which he has furnished a declaration
under sub-section (4) of Section 8 of the sa id Act or on the sales of any goods in the
manufacture of which such goods have been us ed, at the rate specified in sub-section
(1) of Section 9.
(2) Every dealer to w hom sub-section (1) applies shall for the purposes of Section
26, 27, 32 and 42 be deemed to be a registered dealer.
Sec. 9 : Levy of tax
(1) Subject to provisions of sub-section (2) and sub-section (3), the tax pay able by a
dealer under this A ct shall be levied on the taxable turnover relating to goods
specified in Schedule II at the rate m entioned in corresponding entry in column (3) of
the said Schedule.
1(2) Subject to such restrictions and conditions as m ay be prescribed and to the
provisions of sub-clause (iii) of clause (w) of Section 2 -
(a) the tax pay able by a registered dealer on the sales of any goods specified in
Schedule II except the goods specified in Schedule III, to another registered dealer for
use by him inside the State -
(i) as raw m aterial or as incidental goods, in the m anufacture or in the
processing of goods or in the m ining of goods, declared tax free under Section 15 or
exempted in whole under Section 17 and sold by him -
(a) in the State of Madhya Pradesh, or
(b) in the course of inter-State trade or commerce, or
(c) in the course of export out of the territory of India, or
(ii) in the generation or distribution of electrical energy or any other form of
power;
shall be levied at the concessional rate of four per cent.
(b)(i) the tax pay able by a registered dealer on the sale of any goods specified in
Schedule II except the goods specified in Sche dule III, to another registered dealer
holding a recognition certificate under Section 25 for use by him as raw material or as
incidental goods in the m anufacture or pr ocessing or m ining of taxable goods other
than coal; or
(ii) the tax payable by a registered dealer on the sale of any goods specified in
Schedule II to another registered dealer holding a recognition certificate under
Section 25 for use by him as raw material or incidental goods in the mining of coal,
for sale by him in the State of Madhya Prades h or in the course of inter-State trade or
commerce or in the course of export out of the territory of India, shall be levied at the
concessional rate of four per cent :
Provided that when the tax on the sale of such raw material or incidental goods is
payable under sub-section (1) at a rate lower than four per cent, the tax pay able under
clause (a) or clause (b) shall be calculated at such lower rate or at such other lower
rate as may be 2notified by the State Government.
1 In sub-section (2) of Sec. 9, for the words ‘f our per cent’ wherever they occur, the words ‘two
per cent’ have been substituted by MPCT (Am endment) Act, 1998. But, so far the same has
not been made effective.
2 See Noti. No. 20, dt. 1.4.95.
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(3) Where any goods purchased by a registered dealer under clause (a) or clause (b)
of sub-section (2) are used by him contra ry to the purpose specified therein or in
violation of the restrictions and conditions prescribed under the said sub-section such
registered dealer shall be liable to pay in such manner as may be prescribed, tax or
penalty, as the case may be, at the rate equal to the difference of the full rate of tax
under sub-section (1) and the concessional rate of tax under sub-section (2), in respect
of such goods :
Provided that no tax or penalty shall be imposed on a registered dealer where any
goods purchased for use by him as raw material or incidental goods under clause (a)
or clause (b) of sub-section (2), are sold by him subject to such restrictions or
conditions as may be prescribed, to another registered dealer who is a manufacturer of
goods declared tax free under Section 15 or goods exempted in whole under Section
17, or who holds a recognition certificate under Section 25 for the purpose specified
in the said clauses.
Explanation - In this Section -
(i) the expression “taxable goods” shall mean the goods liable to tax under this Act;
(ii) the amount payable for violation of restrictions and conditions shall be by way of
tax in respect of goods other than declared goods and by way of penalty in
respect of declared goods.
Relevant Rules & Forms : Rule 27 & 30; Form 32, 33, 34 & 35
1Sec. 9-A : Tax on right to use
Every dealer who transfers the right to use any goods, as the State Government may
specify by 2notification, for any purpose, (whether or not for a specified period) to
any person for cash, deferred payment or other valuable consideration in the course of
his business, notwithstanding anything contained in the provisions of clause (w) of
Section 2, shall on the total amount realised or realisable by him during the year by
way of payment in cash or otherwise on such transfer, pay tax at the rate of four per
cent on the aggregate of such amount.
3Sec. 9-B : Levy of tax in special circumstances
4(1) Every dealer liable to pay tax under this Act, whose turnover in the year
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1 Section 9-A inserted by MPCT (A mendment) Act, 1995 w.e.f. 1.4.95.
2 See Noti. No. 37, dt. 1.5.95. For exemption to Tent House for the period 1.4.95 to 31.3.01 see
Noti. No. 84, dt. 6.11.95 and for the period 1.4.01 to 31.3.02 see Noti. No. 23, dt. 30.3.01.
3 Section 9-B inserted by MPCT (Amendment) Act, 1997 w.e.f. 1.5.97.
4 Sub-section (1) substituted by MPCT (Ame ndment) Act, 1998 w.e.f. 1.4.99. Earlier to
substitution sub-section (1) read as under :
“Notwithstanding anything contained in clause (x) of Section 2 and sub-section (1) of Section
9, every such dealer liable to pay tax under S ection 9 whose turnover in the year preceding the
commencement of the Madhya Pradesh Vanijy ik Kar (Sanshodhan) Adhiniyam, 1997 exceeds
rupees one crore and every other dealer whose turnover in a year first exceeds rupees one crore
shall, from the date of such commencement or from the date on which the turnover exceeds
rupees one crore, as the case may be, be liable to pay tax on the resale of any goods specified
in Part II to VII of Schedule II and such tax shall be payable on such part of his turnover in
respect of the said goods at the rate specified in column (3) of the said Schedule which remains
after deducting therefrom -
preceding the com mencement of the Madhya Pradesh Vanijy ik Kar (Sanshodhan)
Adhiniyam, 1998 exceeds rupees 1[ten] lacs and every other dealer whose turnover in
a year first exceeds rupees 3[ten] lacs shall, from the commencement of the aforesaid
Act or from the date on which the turnover exceeds rupees 3[ten] lacs, as the case may
be, be liable to pay tax on the resale of any goods specified in 2[Part II to VI] of
Schedule II at the rate of 5[4 percent in case of declared goods and 8 percent in case
of goods other than declared goods] on such part of his turnover in respect of the said
goods which remains after deducting therefrom -
(i) .... deleted w.e.f. 13-8-2002......
(ii) sale price of such goods at the hands of the registered dealer from whom they
have been purchased;
(iii) the amount arrived at in accordance with the provisions of sub-clause (v) of
clause (w) of Section 2]
(2) Every dealer who is liable to pay tax under sub-section (1) shall continue to be so
liable until the expiry of two consecutive y ears during each of which his turnover has
not exceeded the lim its specified in sub-section (1) and on the expiry of such period
his liability to pay tax shall cease.
Sec. 10 : Levy of Purchase tax
(1) Every dealer w ho in the course of his business purchases any goods specified in
Schedule II -
(i) from a registered dealer in the circum stances in which no tax under Section 9
is payable by that registered dealer on the sale price of such goods; or
(ii) from any other person;
shall be liable to pay tax on the purchase pr ice of such goods, if after such purchase
the goods are not sold w ithin the State or in the course of inter-State trade or
commerce or in the course of export out of the territory of India, but are -
(a) sold or disposed of otherwise; or
(b) used or consumed in the manufacture or processing of other goods or used or
consumed otherwise;
such tax shall be levied at the sam e rate at which tax under sub-section (1) of Section
9 would have been levied on the sales of such goods w ithin the State on the date of
such purchase.
3(2) Notwithstanding anything contained in sub-section (1) but subject to such
restrictions and conditions as m ay be prescribed, the tax under sub-section (1)
payable by a registered dealer on the goods, other than the goods specified in
Schedule-III purchased by him for consum ption or use by him as raw m aterial or
incidental goods in the manufacture or in the m ining of goods for sale by him in the
State of Madhy a Pradesh or in the course of inter-State trade or com merce or in the
course of export out of the territory of India or in the generation or distribution of
electrical energy or any other form of power , shall be levied at the concessional rate
of four per cent :
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(i) sale price of declared goods;
(ii) sale price of such goods at the hands of the registered dealer from whom they have been
purchased;
(iii) amount arrived at in accordance with the pr ovisions of sub-clause (v) of clause (w) of
Section 2;
(iv) any other deduction as may be prescribed, in such manner as may be prescribed.”
1 Subs. for words fifty by MPCT (Amendment) Act. 2002 w.e.f. 23-4-2002
2 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f.
1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000.
5 Subs. by MPCT (Amendment) Act. 2002 w.e.f. 13-8-2002
3 In sub-section (2) of Sec. 10, for the words ‘four per cent’ wherever they occur, the words ‘two
per cent’ have been substituted by MPCT (Am endment) Act, 1998. But, so far the same has
not been made effective.
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Provided that when the tax on the purchase of such raw material or incidental
goods is payable under sub-section (1) at a rate lower than four per cent, the tax
payable under this sub-section shall be calculated at such lower rate or at such other
lower rate as may be 1notified by the State Government.
(3) No tax under this Section shall be levied in respect of any year on -
(a) a dealer whose turnover in a year does not exceed the limit specified in sub-
section (5) of Section 5;
(b) a dealer holding a licence under Section 18 in respect of raw material and
incidental goods used in that year in the manufacture of goods in respect of
which he holds such licence;
(c) a dealer in respect of the purchase pr ice of unginned cotton as specified in
Part I of Schedule-II and such other goods in the said part as the State
Government may from time to time by notification specify, who has
consumed or used them as raw mate rial for the manufacture of other goods
and the goods so manufactured are sold by him in the State of Madhya
Pradesh or in the course of inter-State trade or commerce or in the course of
export out of the territory of India;
(d) any other dealer who has no turnover, if his aggregate of purchase prices of
all the goods does not exceed fifty thousand rupees.
(4) Every dealer who has no turnover and is liable to pay tax under sub-section (1)
shall, for the purpose of Sections 26, 27, 28, 32, 33 and 42, be deemed to be a
registered dealer.
Relevant Rules & Forms : Rule 28 & 30; Form 36
2Sec. 10-A : Levy of surcharge on tax payable except on declared goods
(1) There shall be levied a surcharge on the amount of tax payable under this Act at
the rate of fifteen per centum of such amount;
Provided that surcharge shall not be leviable on the amount of tax as is relatable
to declared goods.
(2) The surcharge levied under sub-section (1) shall be in addition to the amount of
tax payable under this Act and all the other provisions of this Act, shall apply to
surcharge so levied as they apply to tax.
Sec. 11 : Dealer not to pass incidence of tax to agriculturists and horticulturists
under certain circumstances
No dealer shall collect any amount, by way of tax, from a person who sells
agricultural or horticultural produce grown by himself or grown on any land in which
he has an interest, whether as owner, usufructuary mortgagee, tenant or otherwise,
when such produce is sold in the form in which it was produced, without being
subjected to any physical, chemical or other process for being made fit for
consumption save mere dehusking, cleaning, grading or sorting.
Sec. 12 : Rate of tax on container or packing material
Notwithstanding anything contained in 3[sub-section (1) of Sec tion 9 or Section 9-B]
⇒
1 See Noti. No. 21, dt. 1.4.95.
2 Sec. 10-A inserted by MPCT (Sec ond Amendment) Act, 1997 w.e.f. 22.8.97.
3 Subs. for the words ‘sub-section (1) of Section 9’ wherever occurred in Section 12 by MPCT
or sub-section (1) of Section 10 w here any goods packed in any container or packing
material are sold or purchased, the container or packing m aterial in which such goods
are so packed shall be deemed to have been sold or purchased along w ith such goods
and the tax under [sub-section (1) of Section 9 or Section 9-B] or sub-section (1) of
Section 10 shall be leviable on the sale or purchase of such container or packing
material at the rate of tax, if any, applicable to the sale, or as the case may be, the
purchase of the goods themselves :
Provided that no tax under [sub-section (1) of Section 9 or Section 9-B] or sub-
section (1) of Section 10 shall be leviable w here the container or packing material is
sold or purchased along w ith the goods declared tax-fee under Section 15 or
exempted in whole from payment of tax under Section 17.
Sec. 13 : Set off or refund of tax in respect of tax paid goods in certain
circumstances
(1) Subject to such restrictions and conditions as m ay be prescribed a set off, as
provided in this Section shall be granted in such manner as m ay be prescribed, to a
registered dealer in respect of tax paid goods in the circumstances specified below -
1(a) when a registered dealer purchases any tax paid goods, other than the goods
specified in Schedule-III, which have borne tax under *[sub-section (1) of Section 9
or Section 9-B] at full rate exceeding th e concessional rate of four per cent or
exceeding such other concessional rate as m ay be 2notified by the State Government
in respect of such goods as raw m aterial or incidental goods and subsequently
consumes or uses such goods as raw material or incidental goods in the manufacture
or in the processing of any goods or in the mining of any goods specified in Schedule-
II which have not been exempted in whole under Section 17 and any such goods after
their m anufacture, processing or m ining ar e sold by him in the State of Madhya
Pradesh or in the course of inter-State tr ade or com merce or in the course of export
out of the territory of India, he shall be entitled to set off at a rate equal to the
difference between the tax at full rate under *[sub-section (1) of S ection 9 or Section
9-B] and the tax at the concessional rate of four per cent or such other aforesaid
concessional rate, as the case may be, in respect of such goods in such manner and on
such quantum of the price at which such goods w ere purchased from a registered
dealer, as may be prescribed.
3(b) (i) When a registered dealer sells any goods specified in Schedule II other than
the goods specified in Schedule III which are tax paid goods in his hands to any
person other than a registered dealer, or any agency and the sale of such goods is
exempt from tax, in w hole or in part, under a notification issued under Section 17 or
under any provision of this Act, he shall, subject to the com pliance of the restrictions
and conditions if any specified in such notification or prescribed under such
provision, be entitled to set off in respect of such goods at a rate equal to the
difference betw een the tax at full rate on such goods under *[sub-section (1) of
Section 9 or Section 9-B] and the tax at th e rate specified under the said notification
or prescribed under such provision in such manner and on such quantum of the price
at which such goods were purchased from a registered dealer, as may be prescribed;
(ii) When a registered dealer purchases any goods specified in Schedule II other
than the goods specified in Schedule III which are tax paid goods in his hands and the
sale thereof by the selling registered dealer to him is otherw ise exempt from tax, in
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(Amendment) Act, 1997 w.e.f. 1.5.97.
1 In clause (a) of Sec. 13(1) for the words ‘four per cent’ wherever they occur, the words ‘two
per cent’ have been substituted by MPCT (Am endment) Act, 1998. But, so far the same has
not been made effective.
* Subs. for the words ‘sub-section (1) of Sec tion 9’ wherever occurred in Section 13(1) by
MPCT (Amendment) Act, 1997 w.e.f. 1.5.97.
2 See Noti. No. 22, dt. 1.4.95.
3 Clause (b) substituted by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95.
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whole or in part, under a notification issued under Section 17 or under any provision
of this Act, the purchaser shall, subject to the compliance of the restrictions and
conditions, if any, specified in such notif ication or prescribed under such provision,
be entitled to set off in respect of such goods at a rate equal to the difference between
the tax at full rate on such goods under *[sub-section (1) of Sec tion 9 or Section 9-B]
and the tax at the rate specified under the said notification or prescribed under such
provision in such manner and on such quantum of the price at which such goods were
purchased from the seller, as may be prescribed.
Explanation - When the amount of set off to which a registered dealer is entitled is
not fully adjusted towards the tax payable by him, the balance of the amount of set off
after adjustment shall be granted to him by way of refund of tax.
1(c) A registered dealer entitled to set off in respect of tax paid goods under clause (a)
or clause (b) shall also be entitled to a set off in the amount of surcharge paid on such
goods equal tExcerpt shown. Open the full act in Lexace.