LexThe Punjab VAT Act 2005
Punjab · state statute
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ACT NO. 8 OF 2005
AN
ACT
to provide for the levy and collection of value added tax and turnover tax on the
sales or purchases of goods and for the matters connected therewith and
incidental thereto, and for the repeal of the Punjab General Sales Tax Act, 1948.
BE it enacted by the Legislature of the State of Punjab in the Fifty-sixth
Year of the Republic of India as follows:--
CHAPTER - I
PRELIMINARY
1. (1) This Act may be called the Punjab Value Added Tax Act, 2005.
(2) It shall come into force from the 1st day of April, 2005.
2. In this Act, unless the context otherwise requires, –
(a) “account books” means record of business transactions and
includes accounts, registers and documents maintained in any manner
including electronic medium;
(b) “appointed day” means the date on which this Act comes into
force;
(c) “business” includes -
(i) any trade, commerce, manufacture, adventure or concern
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 there from; and
(ii) any transaction in connection with or ancillary or incidental to
such trade, commerce, manufacture, adventure or concern;
(d) “capital goods” means any plant, machinery or equipment
including equipment for pollution control, quality control, laboratory and cold
storage, used in manufacturing, processing and packing of taxable goods
for sale;
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Short tttl and
commlnclmlnt.
Dlfinitons.
(e) “carrier of goods” includes a person or a transport company or a
booking agency, who transports, receives or delivers goods;
(f) “casual trader” means a person other than a taxable person or
registered person, who whether as principal, agent or in any other capacity,
undertakes occasional transactions in the nature of business involving
purchase, sale, supply or distribution of goods or conducting any exhibition-
cum-sale in the State, whether for cash, deferred payment, commission,
remuneration or other valuable consideration;
(g) “Commissioner” means the “Excise and Taxation
Commissioner”, appointed by the State Government under sub-section (1)
of section 3;
(h) “declared goods” means goods declared under section 14 of the
Central Sales Tax Act, 1956, to be of special importance in inter- State trade
or commerce;
(i) “designated officer” means an officer appointed under section 3
and conferred with the powers to carry out any of the purposes of this Act by
a notification issued by the State Government;
(j) “document” means title deeds, writing or inscription and includes
electronic data, computer programs, computer tapes, computer discs,
photographs, video tapes and the like that provides evidence;
(k) “goods” means all kinds of movable property , whether tangible or
intangible, other than newspapers, actionable claims, money, stocks,
shares and securities and includes livestock, growing crops, grass, trees,
plants attached to or forming part of the land, which are agreed to be
severed before the sale or under the contract of sale;
(l) “goods vehicle” includes –
(i) any mechanically propelled vehicle adapted for use upon roads
whether the power of propulsion is transmitted thereto from an
external or internal source and includes a chassis to which a body has
not been attached and a trailer constructed or adapted for use for the
carriage of goods and any vehicle not so constructed or adapted when
used for the carriage of goods solely or in addition to passengers, but
does not include a vehicle running upon fixed rails or a vehicle of a
special type adapted for use only in a factory or any other enclosed
premises; and
(ii) any animal - driven or man - driven vehicle used for the carriage
of goods solely or with passengers;
(m) “gross turnover” includes the aggregate of the amounts of sales and/or
purchases made by any person during the given period, including any sum,
charged on account of freight, storage, demurrage, insurance and for
anything done by the person in respect of the goods at the time of or before
the delivery thereof;
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Explanations –
(1) The proceeds of any sale made outside the State by a person,
who carries on business both inside and outside the State, shall
not be included in the gross turnover.
(2) The sum receivable or received from any person in respect of
transaction of forward contract, in which goods are actually not
delivered, shall not be included in the gross turnover.
(3) In respect of transactions of delivery of goods on hire-purchase
or any system of payment by instalments , the amount to be
included in the gross turnover shall be the total sum payable by
the hirer under a hire-purchase agreement in order to complete
the purchase of or the acquisition of property in the goods to
which the agreement relates and includes any sum as payable
by the hirer under the hire-purchase agreement by way of
deposit or other initial payment or credited or to be credited to
him under such agreement on account of any such deposit or
payment whether that sum is to be or has been paid to the
owner or to any person or is to be or has been discharged by
payment of money or by transfer or delivery of goods or by any
other means, but does not include any sum payable as a
penalty or interest or compensation or damages for breach of
the agreement.
(4) The amount to be included in the gross turnover in respect of
movable goods, agreed to be sold under a works contract, shall
be its sale price;
(n) “import” means bringing of goods into the State from any place
outside the territorial jurisdiction of the State;
(o) “input tax” in relation to a taxable person means value added tax
(VAT), paid or payable under this Act by a person on the purchase of
taxable goods for resale or for use by him in the manufacture or processing
or packing of taxable goods in the State;
(p) “input tax credit” means credit of input tax ( in short referred to as
ITC) available to a taxable person under this Act;
(q) “manufacture” includes any activity that brings out a change in an
article or articles as a result of some process, treatment, labour and results
in transformation into a new and different article so understood in
commercial parlance having a distinct name, character, use, but does not
include such activity of manufacture as may be notified otherwise;
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(r) “offence” means any act or omission made punishable under this
Act;
(s) “output tax” in relation to a taxable person means the tax charged
or chargeable or payable in respect of sale and/or purchase of goods, as the
case may be, under this Act;
(t) “person” includes a sole proprietor, a partnership, a Hindu
undivided family, a company, a society, a trust, a club, an institution, an
association, a local authority, a department of any State Government, Union
territory Government or Central Government, a Government enterprise, a
statutory body or other body corporate, who whether or not in the normal
course of business, purchases, sells, supplies or distributes any goods in
the State, irrespective of the fact that the main place of business of such
person is outside the State and where the main place of business of any
such person is not in the State, ‘person‘ includes the local manager or
agent of such person in the State in respect of such business and also
includes a person engaged in the business of -
(i) transfer, otherwise than in pursuance of a contract of property in any
goods for cash, deferred payment or other valuable consideration;
(ii) transfer of property in goods (whether as goods or in some other form)
involved in the execution of works contract;
(iii)delivery of goods on hire-purchase or any system of payment by
instalments;
(iv)transfer of right to use any goods for any purpose (whether or not for a
specified period) for cash, deferred payment or other valuable
consideration; and
(v) 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:
Provided that an agriculturist or a member of his family,
who sells within the State exclusively the agricultural produce,
grown on any land inside the State in which he has an interest,
whether as owner, mortgagee, tenant or otherwise, shall not be
deemed to be a person;
Explanations –
(1) A co-operative society or a club or an association which sells or
supplies goods to its members is a person within the meaning of this
clause.
(2) A factor, a broker, a commission agent, a person’s agent, an
auctioneer or any other mercantile agent by whatever name called and
whether of the same description as here-in-before mentioned or not,
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who carries on the business of selling, supplying or purchasing goods
and who has in the customary course of business, authority to sell
goods belonging to the principals or to purchase goods on their behalf,
is a person within the meaning of this clause.
(3) For the purpose of this clause, “Government” will include the
Government of India or the Government of any State or the Union of
India or the Union Territories.
(4) Each of the following persons or bodies, who dispose of any goods
including unclaimed or confiscated or as unserviceable or scrap
surplus, old or obsolete goods or discarded material or waste products
whether by auction or otherwise directly or through an agent for cash
or for deferred payment or for any other valuable consideration,
notwithstanding anything contained in this Act, irrespective of the fact
whether such disposal was in the course of business or not, shall be
deemed to be a person for the purposes of this Act to the extent of
such disposals, namely:--
(i) Municipal Corporations, Municipal Councils
and other local authorities constituted under any law for the
time being in force;
(ii) Railways Administration as defined under the
Railways Act, 1989;
(iii) Transport and construction companies;
(iv) Any person holding permit for the transport
vehicles granted under the Motor Vehicles Act, 1988, which
are used or adapted to be used for hire;
(v) the State Road Transport Corporations;
(vi) Customs Department of the Government of
India administering the Customs Act, 1962;
(vii) Insurance and Financial Corporations or
companies and banks included in the Second Schedule to
the Reserve Bank of India Act, 1934;
(viii) advertising agencies; and
(ix) any other corporation, company, body or
authority, owned or set up by, or subject to the
administrative control of the Central Government or any
State Government ;
(u) “place of business” means any place where a person purchases or sells
goods and includes the place where such person stores, processes,
produces or manufactures goods or keeps books of accounts or documents
or any other place where business activity is conducted;
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(v) “prescribed” means prescribed by rules made under this Act;
(w) “purchase” with all its grammatical or cognate expressions means the
acquisition of goods for cash or deferred payment or other valuable
consideration otherwise than under a mortgage, hypothecation, charge or
pledge and includes, –
(i) transfer, otherwise than in pursuance of a contract, of property in any
goods for cash, deferred payment or other valuable consideration;
(ii) transfer of property in goods (whether as goods or in some other form)
involved in the execution of a works contract;
(iii) delivery of goods on hire-purchase or any system of payment by
instalments;
(iv) 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) 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 into dictating) 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
purchase of these goods from the person making the transfer, delivery or
supply to a person to whom such transfer, delivery or supply is made ;
(x) “purchase price” means the amount of valuable consideration paid or
payable by a person for any purchase made, including any sum charged on
account of freight, storage, demurrage, insurance and any other sum
charged for anything done by a person in respect of the goods at the time
of or before delivery thereof;
Explanation –
(1) Purchase price shall not include the tax paid or payable under this Act
by a person in respect of such purchase.
(2) In respect of the goods listed in Schedule H, any tax, duty, cess or fee
paid or payable under the Punjab Agricultural Produce Markets Act,
1961 (Punjab Act No. 23 of 1961) or the Punjab Rural Development
Act, 1987 (Punjab Act No. 6 of 1987) or the Punjab Infrastructure
(Development and Regulation) Act, 2002 (Punjab Act No. 8 of 2002)
by or on behalf of the seller or the purchaser, shall also form part of
purchase price.
(y) “quarter” means a period consisting of three months, commencing from
the first day of April, July, October and January of a calendar year;
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(z) “registered person” means a person, who is registered for the purpose of
paying turn-over tax under this Act;
(za) “repealed Act” means the Punjab General Sales Tax Act, 1948;
(zb) “retail invoice” means an invoice issued to the purchaser by a taxable or
registered person or a casual trader, listing therein the goods, sold, with
price, quantity and value;
(zc) “return” means a true and correct account of business pertaining to the
return period in the prescribed form;
(zd) “return period” means the period for which returns are to be furnished by a
person;
(ze) “reverse input tax credit” means an amount of input tax credit, which is
required to be reversed by a taxable person on account of-
(i) credit note for output tax received from seller of goods on purchases in
respect of which input tax credit is claimed;
(ii) goods, returned subsequent to availing the input tax credit;
(iii) goods, subsequently not used in accordance with the conditions
prescribed for availing input tax credit; and
(iv) having availed the credit required to reverse the same in accordance
with the provisions of sub-sections (8) and (9) of section 13;
(zf) “sale” with all its grammatical or cognate expressions means any transfer of
property in goods for cash, deferred payment or other valuable
consideration and includes -
(i) transfer, otherwise than in pursuance of a contract, of
property in any goods for cash, deferred payment or other valuable
consideration;
(ii) transfer of property in goods (whether as goods or in
some other form) involved in the execution of a works contract;
(iii) delivery of goods on hire-purchase or any system of
payment by instalments;
(iv) 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) supply of goods by any unincorporated association or
body of persons to a member thereof for cash, deferred payment or
other valuable consideration;
(vi) 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
(vii) every disposal of goods referred to in Explanation (4) to
clause (t) of this section;
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and such transfer, delivery or supply of any goods shall be deemed to be a
sale of these goods by the person making the transfer, delivery or supply to
a person to whom such transfer, delivery or supply is made, but does not
include a mortgage, hypothecation, charge or pledge.
(zg) “sale price” means the amount of valuable consideration received or
receivable by a person for any sale made including any sum charged on
account of freight, storage, demurrage, insurance and any sum charged for
anything done by the person in respect of the goods at the time of or before
the delivery thereof;
Explanation –
(1) In relation to the transfer of property in goods (whether as goods
or in some other form) involved in the execution of works
contract, ‘sale price’ means such amount as is arrived at by
deducting from the amount of valuable consideration paid or
payable to a person for the execution of such works contract,
the amount representing labour and other charges incurred and
profit accrued other than in connection with transfer of property
in goods for such execution. Where such labour and other
charges are not quantifiable, the sale price shall be the cost of
acquisition of the goods and the margin of profit on them plus
the cost of transferring the property in the goods and all other
expenses in relation thereto till the property in such goods,
whether as such or in any other form, passes to the contractee
and where the property passes in a different form, it shall
include the cost of conversion.
(2) In relation to the delivery of goods on hire purchase or any
system of payment by instalments, the amount of valuable
consideration payable to a person for such delivery.
(3) In relation to the transfer of right to use any goods for any
purpose (whether or not for a specified period), the valuable
consideration received or receivable for such transfer.
(4) The amount of duties levied or leviable on goods under the
Central Excise and Salt Act, 1944 (1 of 1944), or the Customs
Act, 1962 (52 of 1962), or the Punjab Excise Act, 1914 (1 of
1914), shall be deemed to be part of the sale price of such
goods, whether such duties are paid or payable by or on behalf
of the seller or the purchaser or any other person.
(5) Sale price shall not include tax paid or payable to a person in
respect of such sale.
(zh) “Schedule” means the Schedule appended to this Act;
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(zi) “section” means a section of this Act ;
(zj) “State” means the State of Punjab;
(zk) “State Government” means the Government of the State of Punjab;
(zl) “taxable goods” means the goods, other than the goods declared tax free
under section 16 of this Act;
(zm) “tax period” means a period for which a person is required to pay tax under
this Act or the rules made thereunder;
(zn) “taxable person” means a person, who is registered for the purpose of
paying value added tax under this Act;
(zo) “taxable turnover” means that part of gross turnover of sales or purchases,
as may be determined after making such deductions from the gross turnover
of sales or purchases, as are admissible under this Act or as may be
prescribed, on which a person shall be liable to pay tax;
(zp) “Tribunal” means the Tribunal constituted under section 4 of this Act;
(zq) “Turnover tax” (in short referred to as TOT) means a tax, leviable on the
taxable turnover of a registered person as per the provisions of this Act;
(zr) “Value added Tax” ( in short referred to as VAT) means a tax leviable on
the taxable turnover of a persons, other than a registered person, under this
Act;
(zs) “VAT invoice” means an invoice issued by a taxable person to another
taxable person listing therein the goods supplied, with the price, quantity,
value and VAT charged;
(zt) “vessel” includes any ship, barge, boat, raft, timber, bamboos or floating
materials propelled in any manner;
(zu) “works contract” includes any agreement for carrying out, for cash, deferred
payment or other valuable consideration, building ,construction,
manufacturing, processing, fabrication, erection, installation, fitting out,
improvement, modification, repairs or commissioning of any movable or
immovable property; and
(zv) ”year” means the financial year beginning from the first day of April, and
ending with the 31st day of March.
3. (1) For carrying out the purposes of this Act, the State Government
may appoint an officer to be the Commissioner and such other officers to assist
him as it may deem fit.
(2) The Commissioner shall have jurisdiction over the whole of the State and
shall have all the powers and perform all the duties conferred or imposed upon him by
or under this Act. All other officers appointed, under sub-section (1), shall exercise such
powers as may be conferred upon them by the State Government.
(3) Every officer appointed under sub-section (1), to assist the Commissioner,
shall exercise his powers, subject to the general superintendence and control of the
Commissioner.
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Commissionlr
and othlr
officlrs.
(4) The officers appointed under sub-section (1), shall be deemed to be public
servants within the meaning of section 21 of the Indian Penal Code (Central Act 45 of
1860).
4. (1) The State Government shall, by notification in the Official Gazette,
constitute a Tribunal to exercise the powers and discharge the functions conferred on it
under this Act.
(2) The Tribunal shall consist of a Chairman and three other members to
be appointed by the State Government.
(3) The Chairman shall either be a retired Judge of the High Court or a
retired or serving officer of the rank of Chief Secretary to the State Government
or Secretary to Government of India.
(4) The members appointed under sub-section (2), shall have the
following qualifications and experience, namely:-
(a) should be a law graduate and should have at least fifteen years’
experience of practising in the High Court or the Supreme Court of
India in tax matters; or
(b) should be a retired or a serving Officer of the Excise and Taxation
Department of the State with at least two years’ experience of the post
of Additional Excise and Taxation Commissioner; or
(c) should have at least fifteen years’ experience of practicing as a
Chartered Accountant under the Chartered Accountant Act, 1949
(Central Act 38 of 1949), is a member or should have been a member
or should be eligible for appointment as a
member of the Customs, Excise and Service Tax Appellate Tribunal
constituted by the Union Government :
Provided that one member of the Tribunal shall be appointed from each of
the aforesaid categories.
(5) The State Government may appoint one of the members, to be a
Vice-Chairman of the Tribunal.
(6) The Vice-Chairman shall exercise such powers and perform such
functions of the Chairman, as may be delegated to him by the Chairman by a
general or special order in writing. In the absence of the Chairman, the Vice-
Chairman shall act as Chairman.
(7) The Chairman or a member of the Tribunal shall hold office for a term
of three years from the date he assumes charge of his office and he shall not be
eligible for re-appointment.
(8) No person shall be appointed or continue as Chairman or Member of
the Tribunal, if he has attained the age of sixty-seven years.
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Consttuton of
Tribunat.
(9) The Chairman, Vice-Chairman and other members of the Tribunal
shall be entitled to such salaries and allowances and shall be governed by such
conditions of service, as may be specified by the State Government.
(10) The Chairman, the Vice-Chairman or a member of the Tribunal may
be removed from the office by the State Government, if –
(a) he is adjudged an insolvent; or
(b) he takes up employment outside the duties of his office; or
(c) he has become incapable of performing his duties on account of
unsoundness of mind or any other reason; or
(d) he is guilty of such misconduct as would render him unfit to
continue as Chairman or Vice-Chairman or member of the
Tribunal; or
(e) he is convicted of an offence involving moral turpitude.
(11) The Chairman, the Vice-Chairman or a member, as the case may be,
may at any time by writing under his hand addressed to the State Government,
resign his office, but his resignation shall take effect from the date on which it is
accepted.
(12) The Chairman, the Vice-Chairman and members of the Tribunal shall
be deemed to be public servants within the meaning of section 21 of the Indian
Penal Code (Act 45 of 1860).
(13) No order made or act done, or proceedings taken under this Act by or
before the Tribunal, shall be called in question in any manner on the ground of
merely of any defect in the constitution of the Tribunal.
(14) The Tribunal shall have power to award costs. The arrears of such
costs shall be recoverable as arrears of land revenue.
(15) Subject to the previous sanction of the State Government, the
Tribunal shall for the purpose of regulating its procedure, make regulations in
conformity with the provisions of this Act and the rules made there under.
(16) Subject to the directions given by the State Government, the Tribunal
shall sit at such place or places, as it may deem fit.
(17) The State Government may, appoint such officers or officials, as may
be considered necessary to enable the Tribunal to carry out its functions under
this Act.
(18) The administrative expenditure of the Tribunal including salaries,
allowances and pensions, if any, payable to the Chairman, Vice-Chairman,
members, officers and officials of the Tribunal, shall be charged upon the
Consolidated Fund of the State.
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Procldurl of
thl Tribunat.
5. (1) The powers and functions of the Tribunal may be exercised and
discharged by Benches constituted by the Chairman from amongst the members
thereof –
(a) by a Bench consisting of three members;
(b) by a Bench consisting of two members; and
(c) by a single member .
(2) The single member referred to in clause (c) of sub-section (1), may
either be the Chairman or any other member:
Provided that, if any case which comes up before a single member,
who is not the Chairman or a Bench of which the Chairman is not a member,
involves a question of law, such single member or Bench, as the case may be,
may, in his or its discretion, reserve such case for decision by a Bench of which
the Chairman shall be a member.
(3) Where an appeal or application is heard by a Bench consisting of
three members, and the members differ in opinion on any point, then that point
shall be decided in accordance with the opinion of the majority.
(4) Where an appeal or application is heard by a Bench, consisting of two
members, and the members are divided in their opinion on any point, then that
point shall be referred for decision to a Bench, consisting of three members, of
whom, one shall be the Chairman.
(5) In case there are diverse judgments on an issue from the Tribunal or
different Benches of the Tribunal, the Chairman, on a reference from the
Commissioner, shall constitute a multi-member bench of the Tribunal,
comprising himself and at least two other members, to decide that issue. Such a
Bench may recall the earlier decisions and proceed to decide the issue afresh.
The order or the rule laid down by such a Bench, shall override all previous
orders or rules on the matter, and shall be binding on the parties.
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CHAPTER – II
INCIDENCE AND LEVY OF TAX
6. (1) Every person, except a casual trader and one dealing exclusively in
goods declared tax free under section 16, whose gross turnover during the year
immediately preceding the commencement of this Act or during any year subsequent
thereto, exceeded the taxable quantum, as provided in clause (a) of sub-section (3),
shall be liable to pay tax under this Act by way of VAT on the taxable turnover.
(2) Every person, except a casual trader and one dealing exclusively in
goods declared tax free under section 16, whose gross turnover during the year
immediately preceding the commencement of this Act or during any year
subsequent thereto, exceeded the taxable quantum, as provided in clause (b) of
sub-section (3), shall be liable to pay tax under this Act by way of TOT on the
taxable turnover.
(3) For the purpose of this section, the expression ‘taxable quantum’
means-
(a) for registration as a taxable person for VAT -
(i) in relation to any person, who imports taxable goods for sale or
use in manufacturing or processing any goods in the State,
rupee one;
(ii) in relation to a person, who receives goods on
consignment/branch transfer basis from within or outside the
State on which no tax has been paid under this Act, rupee one;
(iii) in relation to a person, liable to pay purchase tax under section
19, rupee one;
(iv) in relation to a person, who is a manufacturer, rupees one lac;
(v) in relation to a person, who is running a hotel/restaurant, rupees
five lac;
(vi) in relation to a person, who is running a bakery, rupees ten lac;
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Incidlncl of
tax.
(vii) in relation to voluntary registration, rupees five lac; and
(viii) in relation to any other person, rupees fifty lac.
(b) for registration as a registered person for TOT –
in relation to a person other than those specified in clause (a) whose
turnover during the preceding year is more than rupees five lac, but
below rupees fifty lac.
(4) Every person, who has become liable to pay tax under this Act, either
by way of VAT or TOT, shall continue to be so liable, until the expiry of three
consecutive years during each of which his gross turnover does not exceed the
taxable quantum and such further period after the date of such expiry, as may
be specified by notification by the State Government and on the expiry of such
specified period, his liability to pay tax, shall cease.
(5) Every person whose liability to pay tax has ceased under sub-section
(4), shall again be liable to pay tax under this Act from the date on which his
gross turnover again exceeds the taxable quantum.
(6) Every casual trader shall be liable to pay tax under this Act by way of
VAT on the taxable turnover including sales through agent within the State.
7. The person registered under the Central Sales Tax Act, 1956 (Central Act No. 74
of 1956), shall be liable to pay VAT under this Act on any sale made by him within the
State, irrespective of the fact that he is not liable to pay tax under section 6 of this Act.
However, the provisions of this section shall not apply in case of a person, who deals
exclusively in goods declared tax free under section 16.
8. (1) Subject to the provisions of this Act, there shall be levied on the taxable
turnover of a person other than a registered person, VAT at such rate, as specified in
Schedules, but not exceeding thirty paise in a rupee:
Provided that the rate of tax applicable on purchase or sale of declared
goods, shall not exceed four percent or such rate, as specified in clause (a) of section
15 of the Central Sales Tax Act, 1956.
(2) Notwithstanding anything contained in this section, where any goods are
sold in container or are packed in any packing material, the rate of tax applicable to
such container or packing material, shall, whether the price of the container or packing
material is charged separately or not, be the same as is applicable to the goods,
contained or packed therein and the turnover in respect of the container and packing
material, shall be included in the turnover of such goods. Where the goods, sold in
container or packed in packing material are tax free, the sale of such container or
packing material shall also be tax free.
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Liabitity of
plrson
rlgistlrld
undlr thl
Clntrat Satls
Ratl of
Vatul Addld
Tax.
(3) The State Government after giving fifteen days notice by notification, of its
intention so to do, may by like notification, alter the rate of tax specified in any of the
Schedules, add to or omit from or otherwise amend the Schedules and thereupon, the
Schedule shall be deemed to have been amended accordingly:
Provided that if, the State Government is satisfied that circumstances exist,
which render it necessary to take immediate action, it may, for reasons to be recorded
in writing, dispense with the condition of previous notice.
9. Subject to the provisions of this Act, there shall be levied on the taxable turnover
of sales of a registered person, TOT at a rate, not exceeding two paise in a rupee, as
the State Government may specify, by notification, in the Official Gazette.
10. The amount of VAT or TOT shall be calculated to the nearest rupee by ignoring
fifty paise or less and counting more than fifty paise as one rupee.
11. (1) No person, who, is not registered under this Act or if registered, is not
liable to pay tax in respect of any sale or purchase, shall collect any amount by
way of tax from any person.
(2) No person, who is registered under this Act, shall collect any amount
by way of tax in excess of the amount of tax leviable under this Act.
(3) No person, who is registered under this Act, shall collect any amount
by way of tax in respect of sale of goods, which are tax free under section 16.
(4) If a person collects tax in contravention of the forgoing provisions of
this Act, he shall be liable to deposit the tax so collected immediately after such
collection, in the Government treasury. In the event of failure of such person to
deposit the tax, the Commissioner or the designated officer, as the case may be,
shall, by order in writing, recover such tax, as per provisions of this Act.
12. (1) Liability of a registered person shall be calculated at the rate, specified
under section 9.
(2) Sale of taxable goods held in stock by a registered person on the
appointed day, which were purchased without payment of tax under the
repealed Act, shall be liable to tax at the rate, specified for those goods under
this Act.
(3) A registered person, whose registration has been continued under
section 21, shall furnish in such form and to such authority, as may be notified, a
statement of taxable goods under this Act, held in stock on the appointed day,
within a period of thirty days from the appointed day.
- 15 -
Bar against
cottlcton of
tax whln
not payabtl.
Liabitity of
rlgistlrld
plrsons.
Ratl of
Turnovlr
Tax.
Rounding of
of tax.
(4) A registered person shall not be entitled to input tax credit for any
purchase.
(5) A registered person shall issue only a retail invoice for sale made by
him and shall not be eligible to issue a VAT invoice.
(6) A registered person shall not be eligible to hold registration under the
Central Sales Tax Act, 1956.
13. (1) A taxable person shall be entitled to the input tax credit, in such manner
and subject to such conditions, as may be prescribed, in respect of input tax on taxable
goods, including capital goods, purchased by him from a taxable person within the
State during the tax period:
Provided that such goods are for sale in the State or in the course of
inter-State trade or commerce or in the course of export or for use in the
manufacture, processing or packing of taxable goods for sale within the State or
in the course of inter-State trade or commerce or in the course of export:
Provided further that a taxable person shall be entitled to partial input
tax credit in any other event, as may be provided in this section in such manner
and subject to such conditions as may be prescribed:
Provided further that if, purchases are used partially for the purposes
specified in this sub-section and the taxable person is unable to identify the
goods used for such purposes, then the input tax credit shall be allowed
proportionate to the extent, these are used for such purposes, in the prescribed
manner:
Provided further that input tax credit in respect of purchase tax paid or
payable by a taxable person under section 19, shall be allowed subject to the
conditions laid therein.
(2) Input tax credit shall be allowed only to the extent by which the
amount of tax paid in the State exceeds four percent on purchase of goods –
(a) sent outside the State other than by way of sale in the course of
inter-State trade or commerce or in the course of export out of
territory of India; and
(b) used in manufacturing or in packing of taxable goods sent
outside the State other than by way of sale in the course of inter-
State trade or commerce or in the course of export out of the
territory of India.
(3) Where a taxable person sends any goods as such or after being
partially processed for further processing on job work basis, he shall debit the
ITC by four percent of the value of such goods. If such goods after processing
- 16 -
Input tax
crldit.
are received back by such person, the ITC debited at the time of despatch, shall
be restored. Such person shall, however, be required to produce proper
evidence in the shape of records, challans or memos or any other document
evidencing receipt of such goods, whenever asked for.
(4) Input tax credit on furnace oil, transformer oil, mineral turpentine oil,
water methanol mixture, naphtha and lubricants, shall be allowed only to the
extent by which the amount of tax paid in the State exceeds four per cent:
Provided that these goods are used in production of taxable goods or
captive generation of power.
(5) A taxable person under this section, shall not qualify for input tax
credit in respect of the tax paid on purchase of, -
(a) automobiles including commercial vehicles, two wheelers, three
wheelers and spare parts for the repair and maintenance
thereof, unless the taxable person is in the business of dealing
in such automobiles or spare parts;
(b) petrol, diesel, aviation turbine fuel, liquefied petroleum gas and
condensed natural gas, unless the taxable person is in the
business of selling such products;
(c) civil structure and immovable goods or properties;
(d) office equipment and building material, unless the taxable
person is in the business of dealing in such goods;
(e) furniture fixtures including electrical fixtures and fittings, unless
the taxable person is in the business of such goods;
(f) air-conditioning units, air circulators and refrigeration units, unless
the taxable person is in the business of dealing in such goods or
where air-conditioning, air circulating or refrigeration is essential
for sale or storage of taxable goods or in the manufacturing
process of taxable goods;
(g) weigh bridge, except when installed inside the manufacturing
premises for use in the manufacturing process of taxable
goods;
(h) goods used in manufacture, processing or packing of goods
specified in Schedule ‘A’;
(i) goods used in generation, distribution and transmission of
electrical energy unless such generation, distribution and
transmission of electrical energy is for captive consumption, in
which case, it would be allowed subject to the provisions of sub-
section (4) of this section;
- 17 -
(j) the provisions of food, beverage and tobacco products, unless the
taxable person is in the business of selling food, beverage and
tobacco products; and
(k) goods used for personal consumption or gifts.
(6) A person, who was earlier registered for VAT and has subsequently
got himself registered for TOT, shall reverse the input tax credit availed by him
before such change of option, on the stock of goods held by him on the day,
when he is registered as a registered person.
(7) A person, who was earlier registered for TOT and has subsequently
got himself registered for VAT, shall not be entitled for input tax credit on the
stock of goods held by him on the day, when he got registered as a taxable
person and shall be liable to pay TOT on such stock, if sold within thirty days
from such date.
(8) A person, who exports goods out of India and has claimed refund of
input tax under sub–section (2) of section 18, shall reverse the input tax credit, if
any, availed by him on such goods.
(9) A person shall reverse input tax credit availed by him on goods which
could not be used for the purposes specified in sub-section (1) of this section or
which remained in stock at the time of closure of the business.
(10) Where the selling taxable person has made any modification in
respect of a sale by issuance of debit or credit note on the invoice book, the
purchasing taxable person shall make necessary adjustment of input tax credit
availed.
(11) Input tax credit shall be non-transferable, except where the ownership
of the business of a person is entirely transferred.
(12) Save as otherwise provided hereinafter, input tax credit shall be
allowed only against the original VAT invoice and will be claimed during the
period in which such invoice is received.
(13) In case the original VAT invoice is lost or mutilated, the input tax
credit will be available only after the designated officer has determined the credit
in the prescribed manner.
(14) If upon audit or cross verification or otherwise, it is found that a
taxable person has made a false input tax credit claim, the Commissioner or the
designated officer, as the case may be, shall order for recovery of the whole or
any part of such input tax credit, as the case may be, without prejudice to any
action or penalty provided for in this Act.
(15) The onus to prove that the VAT invoice on the basis of which, input
tax credit is claimed, is bonafide and is issued by a taxable person, shall lie on
the claimant.
- 18 -
Input tax crldit
in rlsplct of
stock hltd on
thl appointld
day.
14. (1) A taxable person, who was registered under the repealed Act and
whose registration has been continued under section 21, shall be entitled to
input tax credit in respect of the tax paid or payable under the repealed Act on
the goods, other than capital goods, lying in stock with him on the appointed
day, to such extent and in such manner and subject to such conditions, as may
be prescribed. He shall, however, be eligible for input tax credit on capital goods,
if he is in the business of resale of such goods:
Provided that such stock is out of the purchases made within twelve
months prior to the appointed day.
(2) The taxable person, who intends to claim input tax credit under sub-section
(1), shall within forty five days from the appointed day, furnish in the specified form to
the designated officer, a statement of tax-paid goods held in stock.
(3) Input tax credit shall not be available on goods held in stock on the
appointed day in respect of which, deduction from gross turnover was claimed by such
person under the repealed Act or rules.
(4) Input tax credit on the stock, held on the appointed day, shall be allowed on
the basis of the rate of tax, prevailing on the day preceding the appointed day or on the
day of purchase of such goods under the repealed Act or the rate of tax, leviable under
this Act, whichever is the lowest.
(5) Input tax credit available under this section, shall be proportionately
adjusted in equal installments over a period of one year beginning after three months
from the appointed day in such manner, as may be prescribed.
(6) No input tax credit under this section shall be allowed in respect of goods
held in stock -
(a) which are not included in the statement of taxable goods specified
under sub-section (2); and
(b) for which the person does not have in his possession sales vouchers,
issued by a person, registered under the repealed Act, against the
purchases of the said goods, or which are not recoExcerpt shown. Open the full act in Lexace.