LexThe Himachal Pradesh Value Added Tax Act, 2005
Himachal Pradesh · state statute
Open in Lexace · Ask the AI about this actTHE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
1
UPDATED UPTO-28-05-2016
Index of Amended VAT Act, 2005
Sr.
No.
CHAPTERS PAGE NO.
1. CHAPTER-I
PRELIMINARY
2 to 13
2. CHAPTER-II
TAXING AUTHORITIES
13 to 14
3. CHAPTER-III
INCIDENCE, LEVY AND RATE OF TAX
14 to 31
4. CHAPTER-IV
RESISTRATION, RETURNS, ASSESSMENT, RECOVERY
AND REFUND OF TAX
31 to 59
5. CHAPTER-V
ACCOUNTS, SURVEY AND INSPECTION
60 to 83
6. CHAPTER-VI
APPEAL, REVISION AND RECTIFICATION
83 to 93
7. CHAPTER-VII
OFFENCES AND PENALITIES
94 to 99
8. CHAPTER-VIII
MISCELLANEOUS
99 to 113
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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Act No. 12 of 2005
1THE HIMACHAL PRADESH VALUE ADDED
TAX ACT, 2005.
(AS ASSENTED BY THE GOVERNOR ON 31ST DAY OF MARCH, 2005)
A
ACT
to re-enact the law to provide for the levy of a value added tax on the
sales or purchases o f goods in the State of Himachal Pradesh and for
certain other matters connected therewith.
BE it enacted by the Legislative Assembly of Himachal Pradesh in
the Fifty-sixth Year of the Republic of India, as follows: -
CHAPTER -I
PRELIMINARY
Short title and
commencement.
1. (1) This Act may be called the Himachal Pradesh Value
Added Tax Act, 2005.
(2) It shall come into force from such date as the
Government may, by notification, appoint.
Definitions. 2. In this Act, unless there is anything repugnant in the
subject or context, --
(a) ― Act” means the Himachal Pradesh Value Added Tax
Act, 2005.
(b) ― Assessing Authority ‖ means any person appointed by
1 Instructions of the President for promulgation of the Himachal Pradesh Value Added Tax Ordinance,
2005 received vide the Under Secretary to the Government of India, Ministry of Finance, Department of
Revenue O.M. No. 25/6/2005-ST dated 21st February, 2005 (See Appendix)
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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the State Government under sub -section (2) of section 3 to
make any assessment under this Act;
(c) ―business‖ includes, -
(i) any trade, commerce, manufacture, any
adventure or concern, in the nature of
trade, commerce or manufacture, whether
or not such trade, commerce, manufacture,
adventure or concern is carried on with a
motive to make profit and whether or not
any profit accrues therefrom; and
(ii) any transaction in connection with or
ancillary to such trade, commerce,
manufacture, adventure or concern;
(d) ―capital goods‖ means plant, machinery or equipment 1
[including hydraulic mobile pick and cranes] used in the
process of manufacturing, processing and packing of goods
for sale excluding civil structures as may be prescribed;
(e) ― casual dealer ‖ means any person who carries on
occasional transactions of business of buying, selling,
supplying or distributing goods whether for cash, deferred
payment, commission, remuneration or other valuable
consideration;
(f) ― Commissioner‖ means the Excise and Taxation
Commissioner appointed under sub-section (1) of section 3;
1 Clause (d) of section 2 amended vide Ordinance No.10 of 2010 of the Himachal Pradesh Value Added
Tax (Amendment) Ordinance, 2010 w.e.f. 16-11-2010.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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(g) ― dealer‖ means any person who carries on (whether
regularly or otherwise) the business of buying, selling,
supplying or distributing goods, directly or indirectly, for
cash, or fo r deferred payment, or for commission,
remuneration or other valuable consideration, and includes,-
(i) a local authority, a body corporate, a company,
a co -operative society or other society, club,
firm, Hindu Undivided Family or other
association of persons which carries on such
business;
(ii) a factor, broker, commission agent, a dealer‘s
agent or any other mercantile agent, by
whatever name called;
(iii) an auctioneer who carries on the business of
selling or auctioning goods belongi ng 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;
(iv) every person engaged in the business of,--
(a) transfer, otherwise than in purs uance
of a contract, of property in any
goods for cash, deferred payment or
other valuable consideration;
(b) transfer of property in goods
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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(whether as goods or in some other
form) involved in the execution of a
works contract;
(c) delivery of goods o n hire-purchase or
any system of payment by
instalments;
(d) 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;
(e) supply of goods by any
unincorporated association or body of
persons to a member thereof for cash,
deferred payment or other valuable
consideration; and
(f) 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;
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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3 of 1930
Explanation (I). -- Every person who acts as an agent, in
Himachal Pradesh, of a dealer residing outside this State and
buys, sells, supplies or distributes goods in the State or acts
on behalf of such dealer as—
(i) a mercantile agent as defined in the Sale of Goods
Act, 1930; or
(ii) an agent for handling of goods or docum ents of
title relating to goods; or
(iii) an agent for the collection of the payment of
the sale price of goods or as a guarantor for such
collection or payment;
and every local branch or office in Himachal Pradesh of a
firm registered outside this State or a company or other body
corporate, the principal office or headquarters whereof is
outside this State, shall be deemed to be a dealer for the
purpose of this Act.
Explanation (II). -- Every department, or its subordinate
offices, of a Gov ernment which whether or not in the course
of business, buys, sells, supplies or distributes goods,
directly or otherwise, for cash or for deferred payment or for
commission, remuneration or other valuable consideration,
shall, except in relation to any sa le, supply or distribution of
surplus, unserviceable or old stores or materials or waste
products or obsolete or discarded machinery or parts or
accessories thereof, be deemed to be a dealer for the purpose
of this Act.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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Explanation (III). -- For the purpo se of this clause
―Government‖ shall include the Central Government or the
Government of any other State or Union Territory.
74 of 1956.
(h) “declared goods‖ shall have the meaning assigned to that
expression in clause (c) of section 2 of the Central Sales
Tax Act, 1956;
(i) ―Deputy Excise and Taxation Commissioner‖ means the
Deputy Excise and Taxation Commissioner, appointed
under sub-section (1) of section 3 of this Act, to assist the
Commissioner and shall also include the Joint/Additional
Excise and Taxation Commissioner;
(j) ― document‖ includes title deeds, writing or inscription,
statement of account and data stored electronically in
whatever form and the like that furnishes evidence;
(k) ― goods‖ means every kind of movable property (other
than news -papers, actionable claims, stocks and shares
and securities) and includes live stock, all materials,
commodities and articles and every kind of property
(whether as goods or in some other form) involved in the
execution of a works contr act, and all growing crops,
grass, trees or things attached to or forming part of the
land which are agreed to be severed before sale or under
the contract of sale;
(l) ― import‖ means the bringing of goods into Himachal
Pradesh from any place outside its territorial jurisdiction;
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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(m) ―input tax‖ means the amount paid or payable by way of
tax under this Act, by a purchasing registered dealer to a
selling registered dealer on the purchase of goods in the
course of business for re -sale, or for use in the
manufacture of taxable goods or for use as containers or
packing material or for the execution of works contract;
(n) ― invoice‖ means a document listing goods with price,
quantity, tax involved and other particulars as may be
prescribed and includes a bill, cash memorandum, slip,
receipt or similar record, regardless of its form;
(o) ― motor spirit ‖ means any inflammable hydrocarbon
including any mixture of hydrocarbons or any liquid
containing hydrocarbon, which is ordinarily used for
providing reasonably efficient motive power for any form
of motor vehicle;
(p) ― notification‖ means notification published in the
Rajpatra, Himachal Pradesh;
(q) ― output tax ‖ output tax in relation to any registered
dealer means the tax payable under th is Act in respect of
any taxable sale or purchase of goods made by that
dealer in the course of his business;
(r) ―prescribed‖ means prescribed by rules made under this
Act;
(s) “purchase‖ with all its grammatical or cognate
expressions, means the acquisition of goods for cash or
deferred payment or other valuable consideration otherwise
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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than under a mortgage, hypothecation, charge or pledge
and includes—
(i) the transfer, otherwise than in pursuance of a
contract, of property in any goods for ca sh, deferred
payment or other valuable consideration;
(ii) the transfer of property in goods (whether as goods
or in some other form) involved in the execution
of a works contract;
(iii) the delivery of goods on hire -purchase or any
system of payment by instalments;
(iv) the 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;
(v) the supply of goods by any unincorporated
association or body of persons to a member thereof
for cash, deferred payment or other valuable
consideration;
(vi) the 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 the
transfer, delivery or supply and a purchase of those goods by
the person to whom such transfer, delivery or supply is
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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made;
(t) ―registered‖ means registered under this Act;
(u) “reverse input tax‖ means that amount of input tax credit
in relation to any g oods for which input tax credit has
been availed of, but which shall stand reversed in the
circumstances specified in sub -sections (9) and (10) of
section 11;
(v) ―sale‖ means any transfer of property in goods for cash or
for deferred payment or for any other valuable
consideration other than a mortgage, hypothecation, charge
or pledge, and includes—
(i) the transfer, otherwise than in pursuance of a
contract, of property in any goods for cash,
deferred payment or other valuable
consideration;
(ii) the transfer of property in goods (whether as
goods or in some other form) involved in the
execution of a works contract;
(iii) the delivery of goods on hire -purchase or any
system of payment by instalments;
(iv) the transfer of the right to use any goods fo r
any purpose (whether or not for a specified
period) for cash, deferred payment or other
valuable consideration;
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
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(v) the supply of goods by any unincorporated
association or body of persons to a member
thereof for cash, deferred payment or other
valuable consideration;
(vi) the 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 the
transfer, delivery or supply and a purchase of those goods by
the person to whom such transfer, delivery or supply is
made;
(w) ―Schedule” means a Schedule to this Act;
(x) ―section‖ means the section of this Act;
(y) ― State Government ‖ or ― Government‖ means the
Government of Himachal Pradesh;
(z) ―tax‖ or “value added tax” means the tax on the
sale or purchase of goods, levied under section 6
or 7;
(za) ―tax period‖ means the period prescribed for filing
a return;
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
12
(zb) ―timber‖ includes trees when they have fallen, or
have been felled or agreed to be felled and all
wood whether cut up or fashioned or hollowed out for
any purpose or not;
(zc) ―Tribunal‖ means the Tribunal established under section
44;
(zd) ― turnover‖ means the aggr egate amount of sales,
purchases and parts of sales and purchases made by any
dealer during the given period and includes any sum
charged, on account of freight, storage, demurrage,
insurance and for anything done by the dealer in respect
of the goods at the time of or before delivery thereof;
Explanation (I). — The proceeds of any sale made outside
Himachal Pradesh by a dealer, who carries on
business both inside and outside Himachal
Pradesh, shall not be included in the turnover.
Explanation (II). —The turnover of any dealer in respect of
transactions of forward contracts, in which
goods are actually not delivered, shall not be
included in the turnover.
Explanation (III). — The proceeds of sale of any goods on
the purchase of which tax is leviable under
this Act, or the purchase value of any goods
on the sale of which tax is leviable under this
Act, shall not be included in the turnover.
Explanation (IV).— The sum allowed as cash discount
according to ordinary trade practice shall not
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
13
be included in the turnover.
Explanation (V).—The amount to be included in the turnover
in respect of delivery of goods on hire
purchase or any system of payment by
instalments shall be the total sum payable by
the hirer under the hire -purchase agreement
in respect of the goods so delivered, or the
amount actually paid in instalments.
Explanation (VI). — The amount to be included in the
turnover in respect of transfer of property in
goods (whether as goods or in some other
form) involved in the execution of works
contract shall be its sale price.
(ze) ― vehicle‖ includes any carriage or conveyance used on
land, water or air; and
(zf) ―year‖ means the financial year.
CHAPTER-II
TAXING AUTHORITIES
Taxing
authorities.
3. (1) For carrying out the purposes o f this Act, the State
Government may, by notification, appoint a person to be the
Commissioner and such other persons with such designations,
as it thinks fit.
(2) The State Government may, by notification, appoint as
many Assessing Authorities as it may think fit.
(3) The Commissioner and other persons appointed under
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
14
sub-section (1) shall perform such functions and duties as
may be required by or under this Act or as may be conferred,
by the State Government, by notification.
(4) The jurisdiction of th e Commissioner and other officers
posted at the State Headquarters shall extend to the whole of
the State of Himachal Pradesh, and the jurisdiction of other
officers or officials shall, unless the State Government
otherwise directs, by notification, extend to the districts or the
areas of the districts for which they are for the time being
posted.
CHAPTER-III
INCIDENCE, LEVY AND RATE OF TAX
Incidence of
taxation.
4. (1) Subject to the provisions of sections 6, 7 and sub -
section (2) of section 16, every dealer (except one dealing
exclusively in goods declared tax free under section 9)
whose gross turnover during the year immediately preceding
the commencement of this Act exceeded the taxable
quantum shall be liable to pay tax under this Act on all sales
effected and purchases made after the coming into force of
this Act.
(2) Every dealer, who does not deal exclusively in goods
declared to be tax free under section 9, shall be liable to pay
tax under this Act from the date on which his gross turnover
during any year first exceeds the taxable quantum.
(3) Notwithstanding anything contained in sub -sections (1)
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
15
and (2) no tax on the sale of any goods shall be levied if a tax
on their purchase is levied under this Act.
(4) Every dealer who ha s become liable to pay tax under this
Act shall continue to be so liable until the expiry of three
consecutive years during each of which his gross turnover has
failed to exceed the taxable quantum and such further period
after the date of such expiry as m ay be prescribed, and on the
expiry of this later period his liability to pay tax shall cease.
(5) Every dealer, whose liability to pay tax has ceased under
the provisions of sub -section (4), shall again be liable to pay
tax under this Act with effect f rom the date on which his
gross turnover first exceeds the taxable quantum.
(6) In this Act, the expression ―taxable quantum‖ means, --
(a) in relation to any dealer who imports for sale or
use in manufacturing or processing any goods in
Himachal Pradesh: Rupee 1/-;
(b) in relation to any dealer, who himself
manufactures or pr oduces any goods for sale:
Rs. 14,00,000/-;
(c) in relation to any dealer, who runs a hotel,
restaurant, bakery or other similar
establishment wherein food preparations
including tea, are served: Rs. 2―8,00,000/-‖
1 The taxable quantum in clauses (b), (c) enhanced from 2, 00,000/- to 4, 00,000/- vide Act No. 38 of 2011
published in Rajpatra, Himachal Pradesh on 29-09-2011.
2 Substituted for the figures & signs 5,00,000/- to 8,00,000/- by Act No. 13 of 2015 vide notification No.
L.L.R.-D(6)-6/2015-LEG dated 10-05-2015 published in Rajpatra, Himachal Pradesh on 18-05-2015. Prior
to this the previous entry was substituted for the words, figures & signs 4,00,000/ - to 5,00,000/- by Act No.
2 of 2013 vide notification No. LLR-D(6)-35/2012-LEG dated 05-01-2013 published in Rajpatra, Himachal
Pradesh on 15-01-2013.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
16
(d) in relation to any particular classes of dealers
not falling within clauses (a), (b) and/or (c),
such sum as may be prescribed; or
(e) in relation to any other dealer: Rs.18,00,000/-:
Provided that the registration o f dealers already
registered under this clause shall not be cancelled until their
turnover in each of three consecutive years does not entitle
them to cancellation under sub-section (4).
Liability of a
dealer registered
under the
Central Sales
Tax Act, 1956.
(74 of 1956)
5. A dealer registered under the Central Sales Tax Act, 1956
who is not liable to pay tax under section 4 shall nevertheless
be liable to pay tax under this Act on any sale or purchase
made by him inside the State of Himachal Pradesh:
Provided that nothing herein shall apply to a dealer
who deals exclusively in goods declared tax free under
section 9.
Levy of tax.
6. (1) Subject to the provisions of this Act, there shall b e
levied a tax, --
(a) at every point of sale in respect of the goods
specified in the second column of Schedule
‗A‘,
(b) at the prescribed points of purchase in respect
of goods specified in the second column of
Schedule ‗C‘, and
(c) at the first point of sale in respect of the goods
specified in the second column of Schedule
1 Substituted for the words, figures & signs 6,00,000/- to 8,00,000 by Act No. 2 of 2013 vide notification
No. LLR-D(6)-35/2012-LEG dated 05-01-2013 published in Rajpatra, Himachal Pradesh on 15-01-2013.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
17
74 of 1956
‗D‘,
(d) 1at every point of sale in respect of the goods
specified in the second column of Schedule
‗E‘,
on the taxable turnover of a dealer, at the rates as specified
in the respective Schedules or at such rates not exceeding
100 paise in a rupee as the State Government may, by
notification, direct:
Provided that the State Government may notify
different rates in respect of different goods or classes of
goods:
Provided further that the rate of tax in respect of
declared goods shall not exceed the maximum rate of tax
specified in clause ( a) of section 15 of the Central Sales Tax
Act, 1956:
Provided further that subject to furnishing of a
declaration a s may be prescribed, the Government may, by
notification, reduce the rate of tax levied under sub -section
(1) upto 4% in respect of goods sold to the Government, not
being a registered dealer, for captive use in
telecommunication network, or in the gener ation or
distribution of electricity or any other form of power.
(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
1 Clouse (d) inserted vide notification No LLR-d(6)-7/2011-Loos dated 6-05-2011 Published in RHP
(Extra-ordinary) on 07-05-2011.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
18
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 in cluded 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) In this Act, the expression ―taxable turnover‖ means that
part of the dealer‘s gross turnover during any period which
remains after deducting therefrom ---
(a) his turnover during that period on---
(i) the sale of goods declared tax free under
section 9;
(ii) sale or purchase of goods falling under
section 58; and
(iii) s uch other sales or purchases as may be
prescribed; and
(b) the amount of tax included in the gross
turnover.
Levy of
presumptive tax.
7. Notwithstanding anything contained in this Act, every
registered dealer, whose gross turnover in any year does not
exceed such amount as may be prescribed, shall, in lieu of
the tax payable under this Act, pay presumptive tax on the
entire taxable turnover of sales or purchases, as the case may
be, at such rates, not exceeding the rates specified in section
6, as the St ate Government may, by notification, direct, and
subject to such conditions and restrictions and in such
manner as may be prescribed:
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
19
Provided that no input tax credit shall be
available to such dealer:
1―Provided fu rther that a registered dealer who
imports goods for sale shall pay tax on the sale of such goods
imported from outside the State on actual basis i.e. as per tax
applicable on the sale of such goods within the State.‖
Levy of purchase
tax on certain
goods in certain
circumstances.
8. Where a dealer who is liable to pay tax under this Act
purchases any goods other than those specified in Schedule
‗B‘ from any source, and --
(a) uses them within the State in the
manufacture of goods specified in
Schedule ‗B‘, or
(b) uses them within the State in the
manufacture of any goods, other than those
specified in Schedule ‗B‘, and sends the
goods so manufactured outside the State in
any manner otherwise 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, or
(c) uses such goods for a purpose other than
that of resale within the State or sale in the
1 Substituted by Act No. 1 3 of 2015 vide notification No. L.L.R.-D(6)-6/2015-LEG. Dated 1 0.5.2015 published in
R.H.P. on 18.5.2015. Prior to substituted by Act No. 14 of 2009 vide notification No. LLR-D (6)-20/2009-Leg. Dated
19.9.2009 published in R.H.P. (Extra-ordinary) on 22.9.2009 entry was as under:-
―Provided further that no registered dealer, except a brick -kiln owner, who imports goods for sale or use in
manufacturing or processing any goods f or sale, shall be entitled to make payment of presumptive tax under this
section.‖
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
20
course of inter -State trade or commerce or
in the course of export out of the territory of
India, or
(d) sends them outside the State in any manner
otherwise 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,
and no tax is payable on the purchase of such goods under
any other provisions of this Act, there shall be levied a tax on
the purchase of such goods equal to the rate as notified,
under sub-section (1) of section 6, by the State Government.
Tax free
Goods.
9. No tax shall be payable on the sale of goods specified in the
second column of Schedule ‗B‘, subject to the conditions and
exceptions, if any, set out in the corresponding entry in the
third column thereof and no dealer shall charge sales tax on
the sale of goods which are declared tax free from time to time
under this section.
Power to amend
Schedules.
10. The State Government, after giving by notification, not
less than [1ten days‘] notice of its intention to do so, may, by
like notification, add to or delete from the Schedules ‗A‘, ‗B‘,
‗C‘ , ‗D‘ 2or ‗E‘ any goods, or otherwise amend these
1 Substituted by Act No. 14 of 2009 vide notification No. LLR-D (6)-20/2009-Leg. dated 19.9.2009
published in R.H.P. (Extra-ordinary) on 22.9.2009. prior substitution the words were ‗thirty days‖.
2 The word, letter and signs ―or ‗D‘‖, the signs, word and letters ―,‘D‘ or ‗E‘‖ shall be substituted vide
Notification No. LLR -d(6)-7/2011-Loos dated 6 -05-2011 Published in RHP (Extra -ordinary) on 07 -05-
2011.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
21
Schedules, and thereupon the Schedule shall be deemed to
have been amended accordingly.
Input tax
credit.
11. 1[(1) Subject to the provisions of this Act, the input tax
credit which a purchasing registered dealer (h ereinafter in this
section called ‗the purchasing dealer‘) may claim, in respect of
taxable sales made by him during the tax period, shall be –
(i) the amount of input tax paid or payable by such
purchasing dealer to the selling registered
dealer, o n the turnover of purchases of such
goods as have been sold by him during the tax
period; and
(ii) calculated and allowed as provided in this
section, and subject to such other conditions as
may be prescribed.]
(2) The purchasing dealer availing of the input tax credit shall
maintain the tax invoices, the registers and the books of
accounts in the manner as may be prescribed.
(3) 2[Except the goods in respect of which input tax credit is
not admissible under this Act or the rules made thereunder, the
input tax credit shall be allowed to the purchasing dealer in
respect of the turnover of purchases of such taxable goods as
have been sold by him during the tax period, and to the extent
1 Substituted for the word, letter and signs ―or ‗D‘‖, the signs, word and letters ―,‘D‘ or ‗E‘‖ shall be
substituted by Act No. 12 of 2007 published vide Notification No. LLR-D(6) 4/2007 –Leg. Dated
16-5-2007 published in R.H.P. dated 16-5-2007. Sub-section (1) prior substitution was as under :--
―The input tax credit which a purchasing registered dealer (hereinafter in this section called ‗the
purchasing dealer‘), is entitled to claim, shall be the amount of input tax paid or payable by such
purchasing dealer to the selling registered dealer, on the turnover of purchases made by him during
the tax period and input tax credit shall be calculated as provided in this section and allowed
subject to such conditions as may be prescribed.‖ .
2 Substituted by Act No. 12 of 2007 published vide Notification No. LLR-D(6) 4/2007-Leg. dated 16-
5-2007 in R.H.P. Extra dated 16 -5-2007. The words and signs prior to substitution were: ―The input tax
credit shall be allowed to the extent of the amount of input tax pa id by the purchasing dealer on the
purchases of taxable goods made by him in the State, from a registered dealer holding a valid certificate of
registration, which are intended for the purpose of,-‖
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
22
of the amount of input tax paid by such purchasing dealer on
the turnover of purchases of such taxable goods made by him
in the State, from a registered dealer holding a valid
certificate of registration, for the purposes of,--]
(a) sale or re-sale of goods by him in the State; or
(b) sale in the course of inter -State trade or commerce;
or
(c) sale in the course of export out of the territory of
India; or
(d) use as raw material or as capital goods in the
manufacturing or processing of taxable goods for
sale of the nature referred to in clauses (a), (b) or (c);
or
(e) use as containers or packing material of taxable
goods for sale of the nature referred to in clauses (a),
(b), (c) or (d):
Provided that if the goods so purchased are used
partially for the purposes specified in this sub -section, the
input tax credit shall be allowed proportionate to the extent
these are used for the purposes specified in this sub-section:
Provided further that input tax credit on fuels and
lubricants, shall be allowed only to the extent by which the
amount of input tax paid in the State exceeds 4 percent subject
to the condition that such fuels and lubricants are used in the
manufacture of taxable goods or captive generation of power.
(4) Notwithstanding anything contained in sub -section
(3), the input tax credit shall be allowed only to the
extent by which the amount of input tax paid in the
State exceeds 4 percent on purchase of goods—
(a) sent outside the State otherwise 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 manufacture or in packing of taxable goods
sent outside the State otherwise [1than] by way of sale
in the course of inter-State trade or commerce or in
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
23
the course of export out of territory of India.
(5) The input tax credit shall not be claimed by the purchasing
dealer until the tax period in which he receives from a
registered dealer from whom he has purchased the goods, a tax
invoice in the prescribed form (in original) evidencing the
payment of amount of input tax:
2 XX XX XX XX XX .
___________________________________________________________
1 Inserted by Act No.- of 14 of 2009 vide . notification No. . LLR-D (6) -20/2009-Leg. Dated 19.9.2009
published in R.H.P. (Extra-ordinary) on 22.9.2009.
2.. Omitted by Act No.14 of 2009 vide notification No. LLR-D (6) -20/2009-Leg. Dated 19.9.2009
published in R.H.P. (Extra-ordinary) on 22.9.2009. Provisions prior to this amendment were as under:-
―Provided that for go od and sufficient reasons, to be recorded in writing and in the prescribed
manner, the Commissioner or any person appointed under section 3 may allow such credit subject
to such conditions and restrictions as may be prescribed.‖
(6) The input tax c redit on capital goods shall be limited to
plant and machinery directly connected with the manufacturing
or processing of the finished goods and input tax credit as
admissible under this section shall commence from the date of
commencement of commercial pr oduction and shall be
adjusted against tax payable on turnover of sales over a period
of three years:
Provided that in case of closure of business before
the period of three years, no further input tax credit shall be
allowed and input t ax carried forward, if any, shall be
forfeited.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
24
(7) No input tax credit shall be claimed by a purchasing dealer
and shall not be allowed to him for, ---
(a) tax collected on the purchase of goods used in the
manufacture or processing or packing of goods
declared tax free under section 9;
(b) purchases of goods made in the course of inter -State
trade or commerce or in the course of import of goods
into the territory of India or import from outside the
State, in respect of tax paid in any other country or
other State;
(c) purchase of goods made in the State from,--
(i) an un-registered dealer or a casual dealer, or
(ii) a dealer whose certificate of registration has
been suspended, or
(iii) a registered dealer who has opted to pay
lump-sum amount, in lieu of tax, by way of
composition under sub -section (2) of or
presumptive tax under section 7;
(d) purchase of goods used as free samples or gift or for
personal consumption;
(e) goods purchased for the uses specified in sub -section
(3) but not sold because of theft, loss or destruction
for any reason including natural calamity;
(f) purchase of capital goods other than those specified
in sub-section (6);
(g) stock of goods remaining unsold at the time of closure
of business and if a dealer has already taken any input
tax credit ag ainst purchase of such stock of goods
there shall be a reverse tax credit on closure of such
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
25
business;
(h) save as provided in sub -section (4), tax collected on
purchase of goods but subsequently despatched to a
place outside the State in any manner otherw ise than
by way of sale in the course of inter -State trade or
commerce;
(i) save as provided in sub -section (4), tax collected on
the purchase of goods used as raw material in the
manufacture of goods, and the goods so
manufactured are despatched outside the State in any
manner otherwise than by way of sale in the course of
inter-State trade or commerce;
(j) purchase of goods for sale under the transfer of right
to use goods for any purpose (whether for specified
period or not);
(k) purchases where,--
(i) tax invoice is not available with the registered
dealer; or
(ii) there is evidence that the tax invoice has not
been issued by the selling dealer from whom
the goods have been or stated to have been
purchased; or
(iii) original tax invoice does not conta in the details
of tax charged separately by the selling dealer
from whom purchasing dealer has purchased
the goods 1[; and
1 The sign ―.‖,substituted by the sign and the word ―; and‖ and thereafter the new clause (l) inserted by
Act No. 12 of 2007 published vide Notification No. LLR -D (6)4/2007-Leg. dated 16 -5-2007 in R.H.P.
Extra dated 16-5-2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
26
(l) the turnover of purchase of such goods which
have not been sold during the tax period.]
(8) Notwithstanding anythin g contained in this Act, the State
Government may, as may be prescribed, specify any goods in
respect of which input tax credit shall not be allowed in part or
in full or specify the class of dealers who shall not be entitled
to input tax credit in part or in full.
(9) If the goods purchased 1[xxx] for the purposes specified in
sub-section (3) and are subsequently used fully or partly for
purposes other than those specified in the said sub -section, the
input tax credit, if availed of, shall be reduced from the input
tax credit being claimed for the tax period during which such
use has taken place; and such reduction, shall be done in the
manner as may be prescribed.
(10) Subject to the provisions of this section, input tax credit
already availed of shall stand reversed if, --
(a) the dealer discontinues business; or
(b) the certificate of registration granted to the dealer
is cancelled; or
(c) the goods fall under clause (d), (e) or (g) of sub -
section (7); or
(d) excess input tax credit has been claimed; or
(e) the goods purchased are returned to the selling
dealer within three months of the date of purchase of
such goods; or
1 The words ―are intended‖ omitted by Act No. 12 of 2007 published, vide Notification No. LLR-D
(6)4/2007-Leg. dated 16-5-2007, in R.H.P. Extra dated 16-5-2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
27
(f) the credit note has been received from selling
registered dealer for the amount of tax charged in
excess of the tax due according to the pr ovisions of
this Act; or
(g) there exist any other circumstances as may be
prescribed.
(11) The dealer shall be liable to pay such amount of reverse
input-tax credit alongwith interest under section 19 from the
date immediately succeeding the last date prescribed for filing
the return for the period for which such input -tax credit was
claimed till the date of its payment.
(12) Where any purchasing dealer has been issued with a
credit note or debit note or if he returns or rejects goods
purchased, a s a consequence of which the input tax credit
availed of by him during any tax period (to which the
purchase of goods relates) becomes either short or excess, he
shall compensate such short or excess by adjusting the
amount of input tax credit allowed to h im in respect of the tax
period in which the credit note or debit note has been issued
or the goods are returned or rejected, subject to such
conditions as may be prescribed.
(13) The amount of net input tax credit, which may be availed
of by a purcha sing dealer, shall be determined on the basis of
the following formula, namely: -
Net Input Tax Credit = A+B-C
Explanation--- In this formula----
(i) ―A‖ represents the amount of input tax credit
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
28
1[which the purchasing dealer may be allowed
under this section in respect of taxable sales made
by him during the tax period];
(ii) ―B‖ represents outstanding input tax credit brought
forward from the previous tax period; and
(iii) ―C‖ represents reverse input tax credit as
determined under sub-section (10).
(14) The methods that are used by a purchasing dealer in a
year to determine the extent to which the goods are sold, used,
consumed or supplied, or intended to be sold, used, consumed
or supplied in the course of making taxable sales s hall be fair
and reasonable:
Provided that the Commissioner or any person
appointed under section 3 may, after giving the dealer an
opportunity of being heard and for the reasons to be recorded
in writing, reject the method adopted by the purchasing dealer
and calculate the amount of input tax credit.
(15) Where a registered dealer without entering into a
transaction of sale, issues to another registered dealer a tax
invoice, retail invoice, bill or cash memorandum with the
intention to defraud the State Government revenue or with the
intention that the State Government may be defrauded of its
revenue, the Commissioner or any person appointed under
section 3 may, after making such inquiry as he thinks fit and
giving a reasonable opportu nity of being heard, deny the
1 The words ―for which the purchasing dealer is entitled to ‖, substituted by Act No. 12 of 2007
published vide Notification No. LLR -D (6)4 /2007-Leg. dated 16 -5-2007 in R.H.P. Extra dated 16 -5-
2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
29
benefit of input tax credit to such registered dealer issuing or
accepting such tax invoice, retail invoice, bill or cash
memorandum or other invoice either prospectively or
retrospectively from such date as he may fix.
1(16) If a dealer, —
(a) falsely claims Input Tax Credit in his return s to
which he is not entitled, the Commissioner or the Assessing
Authority shall direct such dealer to pay, by way of penalty,
in addition to the tax and interest payable by him, a sum equal
to 2[xxx] the amount of such claim or credit; and
(b) claims incorrect Input Tax Credit in his returns, the
Commissioner or the Assessing Authority shall direct such
dealer to pay, by way of penalty, in addition to the tax and
interest payable by him, a s um equal to 3―twenty five‖
percentum of the amount of such claim or credit.
Explanation: — (i) For the purpose of clause (a) ―falsely‖
means excessive claim made
deliberately with the intent to affect
revenue interest adversely; and
(ii) For the purpose of clause (b)
―incorrect‖ means excessive claim due
to wrong calculation without any
intension to affect revenue interest
adversely.
Net tax
payable.
12. (1) The net tax payable by a registered dealer fo r a tax
period shall be the difference between the output tax plus
1 Substituted by Act No. 2 of 2013 vide notification No. LLR -D(6)-35/2012-LEG dated 05-01-2013 published in
R.H.P. on 15-01-2013.
2 Omitted for the word ―twice‖ by Act No. 10 of 201 6 vide notification No. L.L.R.-D(6)-6/2016-LEG. Dated 26-05-
2016 published in R.H.P. on 28-05-2016.
3 Substituted for the word ―fifty‖ by Act No. 10 of 201 6 vide notification No. L.L.R.-D(6)-6/2016-LEG. Dated 26-05-
2016 published in R.H.P. on 28-05-2016.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005
30
74 of 1956
74 of 1956
purchase tax, if any, and the input tax credit, which can be
determined from the following formula, namely:--
Net tax payable = (O+P) –I
Explanation. —In this formula---
(i) ‗O‘ denotes the output tax payable for any tax
period;
(ii) ‗P‘ denotes the purchase tax paid by a registered
dealer for any tax period; and
(iii) ‗I‘ denotes the input tax paid or payable for the said
tax period, including i nput tax credit, if any, carried
forward from any preceding tax period as
determined under section 11.
(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
dealer, against the tax li ability 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, at the option of the
dealer, under the Central Sales Tax Act, 1956.
(4) Excess amount of input tax credit, if any, after adjustment
under sub -sections (2) and (3) may be carried forw ard to
subsequent tax period or at the option of the dealer, on
application being made in the prescribed mExcerpt shown. Open the full act in Lexace.