The Meghalaya Value Added Tax Act 2003 (Act No.2 of 2005).pdf

The 4th March, 2005 No. LL (B).53/2002/314-The Meghalaya Value Added Tax Act 2003(Act No.2 of 
2005) is hereby published for general information. 
 
MEGHALAYA ACT NO.2 OF 2005. 
 
Assented by the President of India on 25thFebruary 2005. 
Published in the Gazette of Meghalaya Extra-Ordinary issued dated 4th Match, 2005. 
 
THE MEGHALAYA VALUE ADDED TAX ACT, 2003 
AN 
ACT 
 To provided for and consolidate the Laws re lating to le vy of Value Added Tax on Sales or 
Purchase of goods in the State of Meghalaya:  
Be it enacted b y the Legislature of the State of Meghalaya in the Fifty -fourth Year of  the 
Republic of India as follows: 
1. Short title extent and 
commencement:- 
i) This Act may be called the Meghalaya Value Added Tax Act, 
2003; 
ii)  It extends to the whole of Meghalaya. 
iii) It shall come into force on such date as the State Government 
may by notification in the Official Gazette appoint and different 
dates may be appointed for different provisions. 
2. Definitions:- In this Act, unless the context otherwise requires:- 
(i)“Act” means the Meghalaya Value Added Tax Act 2003 
(ii)“Appellate Authority” means the Authority authorized by the 
State Government under Section 27. 
(iii)“Appellate Tribunal” means the Tribunal authorized by the 
State Government under section 29: 
(iv)“Appointed Day” means the day on which the Act comes into 
force.  
(v) “Assistant Commissioner” means Assistant Commissioner of 
Taxes appointed under sub-section (1) of Section 25 or deemed to 
have been appointed under Section 116: 
(vi)“Assesses” means any person by whom tax or any other sum 
of money is payable under this Act and includes every person in 
respect of whom any proceedings under this Act have been taken 
for the assessment of tax payable by him. 
(vii) “Assessing Authority” means any person not below the rank 
of Superintendent of Taxes authorised by the Government, or by 
any authority empowered by the Government to make any 
assessment under this Act. 
(viii)“Board” means Meghalaya Board of Revenue constituted 
under the Meghalaya Board of Revenue Act or under any 
statutory modification or re-enactment thereof: 
 
 
 
 
 
 
 
  ix)“Business” includes 
i) Any trade, commerce or manufacture or execution of work 
contract or any  adventure or concern in the nature of trade, 
commerce, manufacturer  whether or not such trade, commerce, 
manufacture or execution of works  contract or adventure or 
concern is carried on with the motive to make  gain or profit and 
whether or not any gain or profit accuses from such trade  
commerce, manufacture, execution of works contractor adventure 
or concern and:  
ii)Any transaction in connection with or incidental or ancillary to 
such trade  commerce, manufacture, execution or work contract, 
adventure or concerns: 
(x)“Business Premises” means any place where a dealer or a 
transport purchases, sells, transport, books or delivers goods and 
include such place where the stores, processes produces or 
manufacture goods or keeps books  of accounts, any  vehicles or 
vessel or any other carrier where in the goods are stored as used 
for transporting the goods: 
xi)“Commissioner” means Commissioner of Taxes appointed 
under sub- section (1)of Section 25 or deemed to have been 
appointed under Section 116: 
xii)“Capital Goods” means plant machinery and equipment used 
in the process of manufacturing excluding civil structures as may 
be prescribed: 
xiii)“Casual Trader” means a person who whether as principal, 
agent or in any  capacity, has occasional transactions involving 
buying, selling, supplying or 
distributing goods in the State. 
Whether for cash or for deferred payment or for commission, 
remuneration or other valuable consideration: 
xiv)“Declared Goods” means the good declared to be of special 
importance in inter State trade or commerce under section 14 of 
the Central Sales Tax Act 1956(Central Act 74 of 1956). 
xv)“Deputy Commissioner” means Deputy Commissioner of 
Taxes appointed under sub-section (1) of Section 25 or deemed to 
have been appointed under Section116: 
xvi)“Dealer” means any  person who carries on (Whether 
regularly or otherwise) f or cash for commission or for 
remuneration or for deferred payment or for other valuable 
consideration within the State of Meghalaya, the business of: 
(a)Transferring property in goods otherwise than in  pursuance of 
any contract. Or 
(b)Transferring property in goods (whether as goods or in some 
other form) involved in the execution of any works contract. Or  
(c) Delivering goods on hire purchase or any system of payment 
in installment. Or 
(d)Transferring the right to use goods for any purpose (whether 
or not for any specified period): or supplying by way of as part of 
any service or in any manner of goods being food or any other 
article for human consumption or any drink (whether or not 
intoxicating): or 
  (e) Being an association (whether incorporated or not) or body of 
persons supplying to its members any goods, and Dealer also 
includes: 
(1) A local authority, a body corporate, a company, any 
co-operative society or other society  or a club, a firm, a Hindu 
undivided family or other association of persons which carries  on 
such business: 
(2) A commission agent, a broker, a factor, a  del eredere agent, 
an auctioneer, a mercantile  agent by whatever name called who 
carries on business within the State. 
(3)An agent of a non resident dealer or a local branch of a 
company or an association of  person, whether incorporated or 
not, situated outside the State carry on such business  within the 
State: and 
(4)A department, or undertaking or enterprise of the Government 
of any State or Union Territory or of the Government of India. 
(xvii)“Goods” means all kinds of movable property other than 
newspaper, actionable  
claims, stock shares, or securities and 
includes livestock, all materials, articles,  commodities involved 
in the execution of any works contract, case or hire  purchase or 
those to be used in fitting out, improvement or repair of movable 
property. 
(xviii)“Government” means the State Government.xix)“Input 
Tax” means tax payable by the purchasing dealer to the seller.  
(xx)“Manufacture” with all its grammatic al variation cognate 
expression means  producing, making extracting, altering, 
ornamenting, finishing, assembling or otherwise processing, 
treating or adapting any good but does not include any such 
process or mode of manufacture as may be prescribe: 
(xxi)“Non-resident Dealer” means a dealer who effects purchases 
or sales of any goods  in Meghalaya but who has a no fixed of 
business or residence in Meghalaya: 
(xxii)“Official Gazette” means the Meghalaya Gazette: 
xxiii)“Output Tax”  in relation to any person means the tax 
charged in chargeable in  respect of sale or supply of goods made 
by the person: 
xxiv)“Persons” includes an individual ,a joint family, a company, 
a firm, an association  of persons of a body of individuals, 
whether incorporated or not: the Central Government of the State 
Government or the Government of any other State or Union 
Territory in India and a local authority:  
(xxv) “Prescribed” means prescribed by the rules made under this 
Act. 
(xxvi)“Purchase” means any transfer of  property in goods to the 
person making the purchase for cash or deferred payment or other 
valuable consideration but does  not include a transfer by way of 
mortgage, hypothecation, charge or pledge.  
(xxvii)“Purchase Price” means the amount of val uable 
consideration paid or payable by a person for the purchase of any  
  goods less any sum allowed as cash discount, commission or 
commercial rebates granted at the time of delivery of such goods 
but including cost of freight or cost of delivery or the  cost of 
installation, insurance charges or any sum charged for anything 
done by the seller in respect of the goods at the time of, or before 
delivery thereof, other than interest if separately charged. 
xxviii) “Registered Dealer” means a dealer registered  under this 
Act.  
(xxix) “Reverse Tax” means that portion of input tax of the goods 
for which credit has been availed but such goods are used 
subsequently for any purpose other than resale or manufacture of 
taxable goods or execution of work contract or us ed as containers 
or packing materials within the State. 
(xxx)“Resale” means a resale of purchased goods:  
(i) In the same form in which they were purchased: or 
(ii)Without using them in the manufacture of any goods: or 
(iii)Without doing anything to them, which amount to, or results 
in a manufacture: 
(xxxi)“Rules” means the rule framed under this Act: 
(xxxii)“Sale” with all its grammatical variations and cognate 
expression means every  transfer of the property in goods, other 
than by way of mortgage, hypothecation, charge or pledge by one 
person to another in the course of trade or business for cash, 
deferred payment or other valuable consideration and includes:- 
(a)Transfer otherwise than in pursuance of a contact of property 
in 
goods for cash, deferred payment or other valuable 
consideration: 
(b)Transfer of property in goods (whether as goods or in some 
other form)involved in the execution of works contract: 
(c)Delivery of goods on hire purchase or any other system of 
payment by installments:  
(d)A transfer of the right to use any goods for any purpose, 
whether or not for specified period, for cash, deferred payment or 
any other valuable considerations: 
(e)A transfer of goods by any unincorporated association or body 
of persons to a member thereof for cash, deferred payment or any 
other valuable consideration: 
(f)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: 
(g) A transfer of the right to use any goods for any purpose 
(whether or not for a specified period) for cash, deferred payment 
other valuable consideration, and transfer, delivery or supply of 
any good shall be deemed to be sale of those goods by the person 
making the transfer, delivery or supply and purchase of  those 
goods by the person to whom such transfer, delivery or supply is 
made, but does not include a mortgage, hypothecation, charge or 
pledge. 
  Explanation-(a)A sale or purchase of goods shall not be deemed 
to have taken place inside the State if the goods are sold: 
 (i)In the course of inter-State trade or commerce; or 
(ii) Outside the State of Meghalaya; or  
(iii)In the curse of import or export of goods; 
(b)Where there is a single contract of sale or purchase of goods 
situated of more places  than one the provisions  of this 
Exploration shall apply as if there were separate  contract in 
respect of the goods at each of such places; 
(xxxiii)“Sale Price” means the amount of valuable consideration 
paid or payable to a  dealer for the sale or supply of goods, less 
any sum al lowed as cash discount  according to ordinary trade 
practice, but including any amount charged for anything done by 
the dealer with or in respect of the goods at the time of or before  
delivery thereof other than;  
(i)The cost or freight or delivery where such cost is separately 
charged; or 
(ii)The amount representing the cost of labour in the execution of 
any works  contract, where such cost of labour shall be 
determined on the basis of  specification detailed to that effect in 
the deed of contract or in the absence  of such specification on the 
basis of dealer’s accounts produced to the Commissioner’s 
satisfaction or in the case the Commissioner is not satisfied with 
either of the aforesaid, in the manner as may be prescribed; or 
(iii)Amount of tax paid or payable by the purchaser provided that 
where the amount of tax is not separately indicated in the tax 
invoice, the amount of tax shall be calculated by multiplying the 
sale price inclusive of “Tax fraction” which shall be calculated in 
accordance with formula.2+10Where ‘r’ is the percentage rate of 
tax applicable to the sale.  
(xxxiv)“State” means the State Meghalaya; 
(xxxv)“Tax” means tax payable under this Act;  
(xxxvi)“Tax Invoice” means a document listing the goods sold 
with the price, quantity, value and VAT due issued by a taxable 
person to another taxable person;  
(xxxvii)“Tax Point” means the date on which a taxable is 
required to account for the tax on the sale made by him;  
(xxxviii)“Taxable Goods” means goods taxable under this Act; 
(xxxix)“Taxable Person” means a person who is registered or is 
liable to be registered for  VAT and liable to pay tax under this 
Act; 
xl)“Taxable Sale” means sale which is taxable under the 
provisions of this Act.xli)“Transporter” means any person who 
for the purpose of or in connection with or incidental to or in the 
course or his business transports or causes  to transport goods, or 
holds in custody for delivery to any person after transportation 
and includes railway, shipping company, and cargo terminal and 
courier service; 
 
 
  xlii)“Turnover of Purchases” means the aggregate of the amount 
of purchase price paid and payable by a dealer in respect of any 
purchase of goods made by him during a given period, after 
deducting the amount of:- 
(a) Purchase price, if any, refunded to the dealer by the seller in 
respect of any  goods purchased from the seller and returned to 
him within the prescribed period; and  
(b) Deposit, if any, refunded in the prescribed period to the dealer 
by the seller in respect of any goods purchased by the dealer; 
xliii)“Turnover of Sales” means the aggregate of the amount of 
sale price received and  receivable by a dealer in respect of any 
sales of goods made during a given period after deducting the 
amount of:- 
(a) Sale price, if any, refunded by the seller, to a purchaser in 
respect of any goods purchased and returned by the purchaser 
within the prescribed period; and 
(b) Deposit, if any refunded in the prescribed manner by the 
seller to a purchaser  in respect of any goods sold by the 
dealer;(c)And includes, where the Registration Certificate is 
cancelled, the amounts in respect of sale made before the date of 
the cancellation on order received or receivable after such date; 
xliv)“Value Added Tax” means a tax on sales or purchases levied 
under this Act; 
xlv)“Works Contract” means and includes any agreement for 
carrying out for cash or for deferred payment or for any other 
valuable consideration the building  construction, manuf acture, 
processing, fabrication, erection, installation, laying, fitting out, 
improvement, modification, repair or commissioning of any 
movable or immovable property;  
(xlvi)“Year” means financial year; and  
(xlvii)“Zero rating” means zero rate of tax is t o be imposed on 
the commodities against  which rebate should be given for input 
taxes paid.  
CHAPTER II  
INCIDENCE AND LEVY OF TAX  
 
 
3. Incidence Tax (1) Liability:-Subject to other provisions of this Act, every 
dealer:-(a)Whose turnover during the year i mmediately preceding the 
commencement of this Act; 
(i)  Exceeded the taxable quantum; or who was  
(ii) Liable to pay tax under any of the laws repealed by this Act or Central 
Sales Tax Act, 1956(b)To whom clause (a) does not apply and 
i) Whose turnover cal culated from the commencement of any year first 
exceeds within such year the taxable quantum; or  
(ii)Who has become liable to pay tax under the Central Sales Tax Act, 
1956; or 
(iii) Who is registered as a dealer under the Central Sales Tax Act, 1956 or 
under this Act at any time after the commencement of this Act; shall be 
liable to pay tax in accordance with the provisions of this Act. 
(2) Date of liability:-The dealer shall be liable to pay tax on all sales 
effected by him and  
(a) In case of clause (a) of sub-section (i) with effect from the date of 
commencement of this Act. 
(b)In case of sub-clause (i) of clause (b) of sub- section (1) with effect 
from the date  immediately following the day  on which he becomes so 
liable or date or resignation under this Act, whichever is earlier. 
(3) Continuation of liability: -Every dealer who has become liable to pay 
tax under this Act, shall continue to be so liable until the expiry of three 
consecutive years  during which his  turnover has remained below the 
taxable quantum and on the expiry of such period his  liability to pay tax 
shall cease. Provided that any dealer whose liability to pay tax under this 
Act, ceases, may apply for  the cancellation of his  certificate of 
registration, and on such cancellation, his liability shall cease. 
(4) Re-commencement of liability:-Every dealer whose liability to pay tax 
under this Act, has ceased under sub-section (3) or whose certificate or 
registration has been cancelled,  shall, if his turnover calculated from the 
commencement of an y 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 with effect from the date immediately  
following the day on which his turnover again exceeds th e taxable 
quantum, on all sales effected by him after that day. 
(5)Taxable quantum: -For the purpose of this Act, “Taxable Quantum” 
means in relation to any dealer who:- 
(a)Manufacturers or imports for sale any goods into Meghalaya on his 
own behalf or on behalf of his principal:-Nil 
(b) Is engaged in any other business other than clause (a) above. Rs. 1 
(one) lakh. 
Explanation:-For the purpose of computation of tax quantum, the turnover 
of sales effected by a sale dealer shall be taken into account irrespective of 
whether such sales are taxable under this Act or not. 
 
  (6) A dealer who deals exclusively in one or more classes of goods 
specified in the Schedule to be notified under this Act shall not liable to 
pay any tax under this Act. For their purpose o f calculating the gross 
turnover to determine the liability to pay under the Act. 
(a) Except as otherwise expressly provided, the turnover of all sales or as 
the case maybe, the turnover of all purchases shall be taken, whether such 
sales or purchases are taxable or not, and 
(b)The turnover shall include all sales purchases made by a dealer on his 
own account and also on behalf of principal whether disclosed or not.  
4. Tax payable by a 
dealer or a person:- 
Subject to the provision of this Act and to any r ules or notification there 
shall be paid by every dealer or, as the case may be every person who is 
liable to pay under this Act, the tax or taxes leviable in accordance with 
the provisions of this Act. 
5. Levy of Value Added 
Tax on goods 
specified in the  
Schedule appended 
to this Act:- 
(1) Subject to the provision of this Act, and Rules, there shall be levied a 
tax on the turnover of sales of goods specified in the Scheduled to be 
notified in the Official Gazette at the rate set out against each of such 
goods in the Schedule to be notified. 
(2)Taxable turnover of sales in relation  to a dealer, liable to pay tax on 
sale of goods under sub-section (1) of section 3 shall be a part of the gross 
turnover of sales during any period which remains after deducting  there 
from: 
(a) Sales of goods declared as exempt from tax in schedule to be notified; 
(b) Sales of goods which are shown to be satisfaction of the 
Commissioner to have taken place- 
(i) In the course of inter-State trade or commerce, or  
(ii) Outside Meghalaya, or 
(iii) In the course of the import of the goods into or export of the goods 
out of the territory of India.  
 
Explanation:-Section 3,4 and 5 of the Central Sales Tax Act, 1956 shall 
apply for determining whether or not a particular sale or purchase  has 
taken place in the manner indicated in sub-clause (i), sub-clause (ii) or 
sub-clause (iii).(c) 
In case of turnover of sales in relation to works 
contract, the charges towards labour services and other like charges and 
subject to such conditions as may be prescribed; 
Provided that in the cases where the amount of charges towards labour, 
services and other like charges in such contract are not ascertainable from 
the terms and conditions of the  contract, the amount of such charges shall 
be calculated at the prescribed percentage. 
(d)Such other sales on such conditions and restrictions as may be 
prescribed. 
 
6. Purchase tax payable 
on purchase of 
certain goods:- 
6. Subject to other provision of this  Act, every dealer liable to pay tax 
under the Meghalaya P urchase Tax Act repealed by  this Act, shall, with 
effect from the appointed day for the purpose of this section, be liable  to 
pay under this Act on all purchase of goods specified in the Schedule to be 
notified on the last point of purchases within the Sta te at the rate set out 
against each of such goods in such Schedule; Provided that no tax shall be 
levied under this section if the gods purchased are used or consumed in 
the execution of work contract orin the manufacture of taxable goods 
which arein fact sold. 
7. Levy of tax on 
containers and 
packing materials:- 
Where any goods are packed in any  container or packing materials in 
which such goods are packed shall be deemed to have  been sold or 
purchased along with the goods and the tax under section 5 or s ection 6 
shall be levied 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 itself.;  
Provided that no tax under section 5 or section 6 shall be  levied where the 
container or packing material is sold or purchased along with the goods 
declared as exempted from tax under this Act. 
 
8. Exemption:- (1) (a) The sale of  goods in the Schedule to be notified  in the Official  
Gazette shall be exempt from t ax subject to conditions and exceptions set 
out therein. 
(b)Supplies between Special Economic Zones; 
(2) The following shall be zero rated sales for the purpose of this Act and 
shall be eligible for input tax credit; 
(a) export from India; 
(b) sales to Special Economic Zones; 
(c)supplies from Domestic Tariff Area to Export Orientated Unit 
Electronic Hardware  Technology Park/Software Technology Park Units 
for the purpose export only. 
 
9. Output Tax:- (1) Output tax in relation to a registered dealer means t he tax payable 
under this Act in respect on any sale of goods by that dealer in the course 
of his business. 
(2)Subject to the provisions of section II, a dealer shall be liable to pay the 
output tax under this Act which shall be levied on the taxable turnover at 
the rates and subject to such conditions as may be prescribed from time to 
time. 
 
10. Input tax:- Input tax in relation to a registered dealer means the tax charged under this 
Act by the selling dealer to such dealer on the sale to him of any goods for 
resale or use in manufacturing or processing of goods for sale. 
11. Input tax credit:- (1) Subject to other provisions of this section, there shall be input tax  
credit of the amount of tax paid or payable by  registered dealer in respect 
of his purchase of taxable goods for resale in Meghalaya or for use by him 
directly in the manufacture of  taxable goods in Meghalaya and containers 
and other materials for the packing of such goods or inputs thereof in 
Meghalaya for sale in Meghalaya against the amount  of tax or payable by 
him under this Act on the sales of taxable goods in Meghalaya. 
 Explanation:-No input tax credit shall be available to a registered dealer 
for tax paid or payable at the time of purchase of goods if such goods are 
not sold because of any theft, loss  or destruction for any reason, including 
natural calamity, and if a dealer has already taken any  input tax credit 
against purchase of such goods there shall be reverse tax credit at the end 
of the month in which such goods are stolen, lost or destroyed. 
(2)A registered dealer who intends to claim input credit under sub-section 
(i) shall, for the  purpose of determining the amount of input tax credit 
maintain accounts, evidence and such other records as may be prescribed 
in respect of the purchases and sales made by him in Meghalaya. 
 
  (3) Subject to other provisions of this sub -section, a registered dealer who 
has claimed input  tax credit on his purchases and intends to sell goods in 
Meghalaya will get his input tax credit reversed on the da te of transfer of 
such goods to such other dealer and shall issue a certificate, as may be 
prescribed in favour of such dealer certifying the amount of input tax credit 
against purchase of such goods or purchases f input thereof, as the case 
may be, in Meghalaya and the agent shall be entitled to get the credit of the 
same. 
(4) No input tax credit under this section shall be allowed to a registered 
dealer against his  purchases unless the amount of tax has been separately 
charged and shown in the tax invoice  issued to him by a registered dealer 
from whom purchases of such goods have been made. 
(5) No input tax credit under this Section shall be allowed to a registered 
dealer in respect of tax paid under Section-6. 
(6) Subject to sub-section (7) an input tax c redit cannot be claimed by the 
registered dealer unless the registered dealer has an original tax invoice for 
the relevant supply of purchases. 
(7) Where a registered dealer fails to produce the original tax invoice 
evidencing the input tax  paid, the Commi ssioner may, subject to such 
restrictions and conditions as may be  prescribed. Allow an input tax credit 
for the period in which the credit arises if the  Commissioner is 
satisfied.(a)That the failure produce tax invoice is not due to any fault of 
the deale r, and(b)That the amount of input tax claimed by the registered 
dealer is correct. 
(8)Subject to other sub-sections of this section, input tax credit referred to 
in sub-section (1)in relation to a period shall be determined as follows:-The 
input tax credit is the aggregate of input tax paid or payable by the dealer in 
relation to a period less. 
(i) Input tax paid or payable in respect of goods returned or rejected by him 
during such period.  
(ii) Input tax paid or payable in respect of goods taxable under t his Act or 
inputs used for manufacturing of such goods, as the case may be disposed 
of otherwise than by way of sale. 
(9) Notwithstanding anything contained in any sub-section of the section: 
(a) The amount of input tax credit shall not include tax paid or  payable in 
other States or Unions Territories on goods brought into Meghalaya from 
outside the State. 
(b) No input tax credit shall be allowed against tax paid or payable on 
goods remaining unsold at the time of stoppage or closure of business and 
if a de aler has already taken  any input tax credit against purchase of such 
stock of goods, there shall be reverse tax credit on the date of stoppage of 
closure of such business. 
(c) No input tax credit on tax paid or payable in Meghalaya on purchase of 
goods or 
inputs used in manufacturing of goods in Meghalaya and 
subsequently sent to other States or Union Territories otherwise than by 
way of sale shall be available.  Provided that if a dealer has already taken 
input tax credit either in full or in part, there  shall be a reverse credit 
against each such transfer in the manner as may be prescribed. 
 
 
  (d) No input tax credit shall be allowed against tax paid or payable on 
such purchase and under such terms and conditions as may be prescribed. 
(e) For the purpose of determining the amount of input tax to be reverse 
under this section, any one of the methods as may be prescribed will be 
applied. 
 
12 Reverse tax credit:- If goods are purchased intended for use specified in sub -section (1) of  
Section 11 and are subse quently used fully or partly for purpose other 
those specified under the said sub-section, the input tax credit availed at 
the time of such purchase, calculated in such manner as may be 
prescribed, shall be reduced from the tax credit for the period which the 
said utilisation otherwise has taken place. 
 
13. Net tax credit:- The net tax credit to which  a registered dealer is entitled shall be 
determined by the following formula, namely:- 
Net tax credit=A+B+C 
Where 
A = the amount of input tax credit the dealer is entitled to under 
sub-section (1) of section 11. 
B = outstanding credit brought forward as determined under clause (1) of 
section 11 from the previous period or under sub-section (2) of section 19. 
C= reverse tax credit as determined under section 12. 
 
14. Input tax credit 
exceeding tax 
liability:- 
(1) If a registered dealer’s (other than an  exporter) input tax  credit 
determined under section 11 for a period exceed tax liability for that 
period, the excess may be set off against any outstanding tax under this 
Act. 
(2)The excess input tax credit after adjustment under sub-section (1) of 
Section 11 may be  carried forward as an input credit to the following 
period or periods. 
 
15. Adjustment of input 
tax credit:- 
Where any purchaser, being a registered  dealer, has been  issued with a 
credit note or debit note in terms of sub-section (1) of section 20 or if her  
returns or rejects goods purchased as a consequence of which the input tax 
credit availed  by him in any period in respect of which the purchase of  
goods relates becomes less or excess, he shall compensate such less credit 
or excess credit by adjusting the amount of  tax credit allowed to him in 
respect of the tax period in which the credit note has been issued or goods 
are returned subject to conditions as may be prescribed. 
 
16. Burden of proof:- In respect of any sale or purchase effected by a dealer, the burden of  
proving that he is liable to any tax under section 6, section 7 or that he is 
eligible to input tax credit under section 11 shall be on him. 
17. Levy of presumptive 
tax on registered 
retailers:- 
All registered retailers whose gross turnover of sales does not exceed 
rupees five lakhs, subject to such conditions and restrictions as may be 
prescribed, shall pay in lieu of the tax as specifi ed under section 
orsection6 a tax at such percentage of the entire taxable turnover of such 
sales and purchase as the Government may, by order, notify subject to the 
condition that no input tax credit shall be available to such dealers; 
 
 
  Provided that payment of tax under this section shall not apply to a 
registered retail dealer who imports goods from outside the State for the 
purpose of carrying out his business; 
Provided further that a registered retail dealer may, by exercising option in 
the prescribed manner, elect to pay tax as specified under section 5 or 
section 6 of this Act in lieu of the provisions of this section. 
 
18. Net tax payable by 
the dealer:- 
(1) For the purpose of calculating net tax payable by a registered dealer 
for a period, the input tax credit as determined under sub-section (1) of 
section 11 shall be allowed set off against the tax by the registered dealer 
in respect of all taxable sales other than sales, as may be prescribed, made 
during that period. 
(2) Subject to provisions of section 11, the net tax payable by a registered 
dealer for a period is to be calculated according to the following formula 
namely; Where ‘A’ is the aggregate of the tax payable by the registered 
dealer during the period and ‘B’ is the total input tax credit for the period. 
(3) If the said opening stock of goods.  (a) has suffered tax under the 
Meghalaya Finance (Sales Tax) Act, and(b) is intended to be used for the 
purposes specified in sub-section (1) of Section 11. 
 
19. Stock brought 
forward during 
transition:- 
The amount of tax suffered under this Act mentioned in clause (a) on such 
opening stock, in such manner and subject to such condition and 
restriction and up to the extent as maybe prescribed, shall be credited to 
the dealer and can be availed as outstanding credit brought forward in 
terms of section 13 in the first tax period after the commencement of this 
Act. Provided that no tax credit under this section shall be allowed 
unless:- 
(a)The dealer has in his possession, sale vouchers issued by a de aler 
registered under the Meghalaya Finance (Sales Tax) Act against the 
purchases of the said goods; and 
(b)The amount of tax the goods have suffered at the first point is indicated 
separately on the said vouchers. 
(4) No tax credit under sub-section(2) st ock for which under sub-section 
(2) the Commissioner may, after providing the dealer an opportunity of 
being heard direct him to pay a penalty equal to twice the amount of tax 
credit so claimed. 
(4) If the Commissioner is satisfied that a dealer: 
(a) Has c laimed tax credit for stock for which he is not entitled for 
claiming tax credit as per the provisions of sub-section (2) and sub-section 
(3); or  
(b) Has claimed excess tax credit than allowed under sub-section (2) the 
Commissioner may, after providing the dealer an opportunity of being 
heard direct him to pay a penalty equal to twice the amount of tax credit 
so claimed. 
 
 
 
20. (1) Credit and debit 
notes:- 
(1) Where a tax invoice has been issued and the amount shown as tax 
charged in the tax invoice exceeds the tax chargeable under this Act in 
respect of that sale, the registered dealer making the sale shall provide the 
purchaser with a credit note containing the requisite particulars as 
prescribed. 
(2)Where tax invoice has been issued and the tax chargeab le under this 
Act in respect of the sale exceeds amount of tax charged in that tax 
invoice, the registered dealer making the sale shall provide the purchaser 
with a debit note containing the requisite particular as prescribed. 
(3) In case of goods returned or rejected by the purchaser, a credit note 
shall be issued by the selling dealer to the purchaser and a debit note will 
be issued by the purchaser to the selling dealer containing particulars of 
the transaction as prescribed. 
 
 CHAPTER III 
 
LIABILITY IN SPECIAL CASES 
21 Liability to pay in 
case of death- 
 (1) Where a dealer, liable to pay tax under the Act, dies then:- 
 
(a)If the business carried on by dealer is continued after his death by his 
legal representative or any other person, such legal repres entative or other 
person shall be liable to pay tax including any penalty, sum forfeited and 
interest due from such dealer under this Act or under any earlier law, in 
the like manner and to the same extent as the decreased dealer, and 
 
(b)If the business c arried on by the dealer is discontinued whether before 
or after his death, his legal representative shall be liable to pay out of the 
estate of the decreased, in the like manner and to the same extent as the 
decreased dealer would have been liable to pay i f he had died, the tax 
including any penalty, sum forfeited and interest due from such dealer 
under this Act, or under any earlier law, whether such tax including any 
penalty, sum forfeited and interest has been assessed before his death but 
has remained unpaid, or is assessed after his death. 
 
(2)Where a dealer, liable to pay tax under this Act, is a Hindu Undivided 
family and the joint family property is partitioned amongst the members 
or group of members, then each member or group of members shall jointly 
and severally liable to pay the tax including and penalty, sum forfeited and 
interest due from the dealer under this Act or under any earlier lay up to 
the time of the partition, whether such tax including and penalty sum 
forfeited and partition. 
 
(3)Where a dealer liable to pay tax under this Act, is a firm, and the firm 
is dissolved, and then every person who a partner shall be jointly and 
severally liable to pay to the extent to which he is liable under section 23, 
the tax including any penalty, sum forfeited and interest due from the firm 
under this Act or under any earlier law, up to the time of dissolution, 
whether such tax including any penalty, sum forfeited and interest has 
been assessed before such dissolution but has remained unpaid or is 
assessed after dissolution 
  (4)Where as dealer, liable to pay tax under this Act, transfers or otherwise 
disposes of his business in whole or in part or effects any change in the 
ownership thereof, inconsequence of which he is succeeded in the 
business or part  thereof by any other person, the dealer and the person 
succeeding shall jointly and severally be liable to pay the tax including 
any penalty, sum forfeited and interest due from the dealer under this Act 
or under any earlier law, up to the time’s of such transfer, disposal or 
change, whether such tax including any penalties, sum forfeited and 
interest has been assessed before such transfer, disposal or change but has 
remain unpaid is assessed thereafter. 
 
(5)Where the dealer, liable to pay tax under this A ct:-Is the guardian of a 
ward on whose behalf the business is carried out by the guardian or is 
trustee who carry on the business under a trust for the beneficiary, then, if 
the guardianship or the trust is terminated, the ward or, as the case may be, 
the beneficiary shall be liable to pay the tax including any penalty, sum 
forfeited and interest due from the dealer up to the time of the termination 
of the guardianship or trust whether such tax including any penalty, sum 
forfeited and interest has been assessed before the termination of the 
guardianship or trust, but has remain unpaid, or is assessed thereafter. 
 
(6)Where a dealer is liable to pay tax under this Act, is succeeded in the 
business by any person in the manner described in clause (a) of 
sub-section (1) or in sub-section (4) then such person shall be liable to pay 
tax on the sales or purchases of goods made by him on and after the date 
of succession add shall (unless he already holds a certificate of 
registration) within sixty days thereof apply for registration. 
 
22 Certain agents liable 
to tax for sales on 
behalf of principal- 
(1) Where any persons sells or purchases any taxable goods on behalf of 
his principal then such person and his principal shall both be jointly and 
severally liable to pay taxes on the turnover of such sales of purchases. 
 
(2) If the principal on whose behalf commission agents have sold or 
purchased any goods, shows to the satisfaction of the Commissioner that 
the tax has been paid by the commission agents on such goods unde r 
sub-section (1), the principal shall not be liable to pay the tax against in 
respect of the same transaction. 
 
(3) Where a manager or agent of a non- resident dealer sells or purchases 
any goods on behalf of a non- resident dealer in State, then the 
non-resident dealer and the manager or agent residing in the State, shall be 
jointly and severally liable to pay tax on the turnover of such sales or 
purchases;  
 
Provided that, if the non- resident dealer shows to the satisfaction of the 
Commissioner that the tax payable in respect of such sale or purchases has 
been paid by the manager or agent residing in the State, then the 
non-resident dealer shall not be liable to pay tax in respect of the same 
transaction. 
  
23. 23.Liability of 
partners:- 
(1) Notwithstandin g anything contained in the Indian Partnership Act, 
1932 or any contract to the contrary, where any firm is liable to pay tax 
under this Act, the firm and each of the partners of the firm shall be jointly 
and severally liable for such payments and accordin g any notice or order 
under this Act may be served on any person who was a partner during the 
relevant time whether or not the firm has been dissolved and all the 
provisions of this Act shall apply accordingly. 
 
(2)Where any such partner retires from the f irm, he shall be liable to pay 
the tax, penalty; sum forfeited and interest remaining unpaid at the time of 
his retirement and any such amount due up to the date of retirement 
though un-assessed at that date. 
 
24. Amalgamation of 
companies:- 
(1) When two or more companies are to be amalgamated by the order of a 
Court or the Central Government and the order it to take effect from a date 
earlier to the date of the order and any two or more such companies have 
sold or purchased and goods to or from each other in the period 
commencing on the date from which the order is to take effect and ending 
on the date of the order, then such transaction of sale and purchase will be 
included in the turnover of sales or of purchases of the respective 
companies and will be assessed to tax accordingly. 
 
(2) Notwithstanding anything contained in the said, for all the purposes of 
this Act, the said two or more companies will be treated as distinct 
companies and will be treated as such for all periods up to the date of the 
said o
rder and the registration certificates of the said companies will be 
cancelled, where necessary, with effect from the date of the said order.(3) 
Words and expressions used in this section, but not defined, will have the 
respective meanings to those in the Companies Act, 1956. 
 
 
 
 
 CHAPTER IV  
 
TAXING APPELLATE AND REVISIONAL AUTHORITIES ANDENFORCEMENT 
BRANCH 
25 25.Salestax 
authorities- 
  (1) For carrying out the purpose of this Act, the State Government may 
be notification appoint a person to be the Commi ssioner of Taxes, 
together with such other persons to assist him as it thinks fit and may 
specify the area or areas over which they shall exercise jurisdiction.(2) 
Persons appointed under sub-section (1) shall exercise such powers as 
may conferred and perf orm such duties as may be required by or under 
this Act. 
 
26. Delegation of 
Commissioner’s 
powers- 
(1) Subject to such restriction and conditions as may be prescribed, the 
Commissioner may, by order in writing, delegate any of his powers under 
this Act to  any person appointed to assist him under sub-section (1) of 
section 25.  
(2) Notwithstanding anything contained in sub- section (1), the 
Commissioner may transfer any case or matter from any person appointed 
under sub-section (1) to assist him to any other 
person so appointed 
whether such other person has jurisdiction over the area to which the case 
or matter relates or not, provided he is otherwise competent to deal with 
such case or matter in exercise or performance of the powers or duties 
referred to under this sub-section. 
 
27. Appellate Authority:- The State Government may authorize an officer, not below the rank of an 
Assistant Commissioner of Taxes appointed under the sub-section (1) of 
Section 25 to exercise the powers and perform the functions of t he 
Appellate Authority under section 65. 
 
28. Revisional 
Authority:- 
The Commissioner of Taxes appointed under sub-section (1) of Section 25 
shall not exercise the powers and performs the functions of the Revisional 
Authority under section 66 and section 67. 
29. Appellate Tribunal:- The Meghalaya Board of Revenue shall functions as Appellate Tribunal.  
 
30. Enforcement 
Branch:- 
(1) With effect from the appointed day, the Enforcement Branch 
constituted under the Meghalaya Sales Tax Act shall be deemed to have 
been constituted under this Act for discharging the functions referred to in 
sub-section (3) of this. 
(2) The officers of the Enforcement Branch shall work under the direction 
of the Assistant Commissioner of Taxes subject to over all control of the 
Commissioner of Taxes. 
(3) The  Enforcement Branch on information or of its over motion or 
where the Commissioner so directs, carry out investigation or hold inquiry 
into any case of alleged or suspected evasion of tax as well as malpractice 
connected there with and send a report in respect thereof to the 
Commissioner. 
 
 CHAPTER V 
REGISTRATION OF DEALER AND DEMAND OF SECURITY ETC. 
31. Compulsory 
registration of 
dealers- 
(1) Subject to the other provisions of this chapter, no dealer shall, while 
being liable to pay tax under section 3, carry on business as a dealer unless 
he has been registered and possesses a certificate of registration. Provided 
that a dealer liable to pay tax under section 3 shall be allowed thirty days 
time from the date from which he is first liable to pay such tax to get 
himself registered. 
(2) Every dealer required by sub-section (1) to be registered shall make 
application in this behalf in the prescribed manner to the prescribed 
authority and such application shall be accompanied by a declaration in the 
prescribed form duly filled up and signed by the dealer specifying therein 
the class or classes of goods dealt in or manufactured by him. 
(3) If the said authority is satisfied that and application for registration is in 
order, he shall, in accordanc

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