LexThe Telangana Value Added Tax Act, 2005.
Telangana · state statute
Open in Lexace · Ask the AI about this actTHE TELANGANA VALUE ADDED TAX ACT, 2005.
(ACT NO. 5 OF 2005)
ARRANGEMENT OF SECTIONS
Sections
CHAPTER - I
Preliminary
1. Short title, extent and commencement.
2. Definitions.
CHAPTER - II
APPELLATE TRIBUNAL AND APPOINTMENT OF
OFFICERS
3. Appellate Tribunal.
3-A. Appointment of Officers.
CHAPTER - III
INCIDENCE, LEVY AND CALCULATION OF TAX.
4. Charge to tax.
5. Act not to apply to sales or purchases outside the
State, in the course of import or export, etc.,
6. Tax on packing material.
7. Exemptions.
7-A. Exemption of Tax on sale of goods for certain purposes
to an unit located in any Special Economic Zone.
8. Zero-rated sales.
9. Input tax credit for dealers for goods in Schedule VI.
10. Turnover Tax.
11. Calculation of Tax payable.
2 [Act No. 5 of 2005]
12. VAT payable.
13. Credit for input tax.
14. Tax invoices.
15. Power of State Government to grant refund of tax.
16. Burden of proof.
CHAPTER - IV
REGISTRATION
17. Registration of Dealers.
18. Tax payer Identification Number and General
Registration Number.
19. Cancellation and Amendment of Registration.
CHAPTER - V
PROCEDURE AND ADMINISTRATION OF TAX
Returns and Assessments
20. Returns and Self assessments.
21. Assessments.
Payment and Recovery of Tax
22. Due date for Payment of Tax.
23. Liability of executor, administrator, legal representative.
24. Liability of partnership firms.
25. Tax as an arrear of land revenue.
26. Preferential claims to assets.
27. Transfers to defraud revenue void and Provisional
Attachment of Property.
28. Powers of Deputy Commissioner under Revenue
Recovery Act.
[Act No. 5 of 2005] 3
29. Recovery of tax from third parties.
30. Recovery of tax when business transferred.
Appeals and Revision
31. Appeal to Appellate authority.
32. Revision by Commissioner and other prescribed
authorities.
33. Appeal to the Appellate Tribunal.
34. Revision by High Court.
35. Appeal to High Court.
36. Petitions, applications to be heard by a Bench.
37. Limitation in respect of certain assessments or re-
assessments ordered.
Refund of Tax
38. Refund of Tax.
39. Interest on over payments and late refunds.
40. Power to adjust, withhold refunds.
CHAPTER VI
RECORDS AND INVESTIGATION POWERS
41. Issue of Bills.
42. Records.
43. Access and seizure of goods, books, records and
computers.
44. Fair Market Value.
CHAPTER - VII
Establishment of Check Posts
45. Establishment of check posts.
4 [Act No. 5 of 2005]
46. Power to inspect carrier’s places.
47. Transit Pass.
48. Possession and submission of certain records by
owners etc., of goods vehicles.
CHAPTER VIII
Offences and Penalties
49. Penalty for failure to register.
50. Penalty for failure to file a return.
51. Penalty for failure to pay tax when due.
52. Penalty for assessment issued for failure to file a return.
53. Penalty for failure to declare Tax Due.
54. Penalty for failure to use or misuse of TIN & GRN.
55. Penalty for issue of tax invoice and for the use of false
tax invoices.
56. Penalty for failure to maintain records.
57. Penalty for unauthorized/ excess collection of tax.
58. Prosecutions for Offences.
59. Offences of obstructing the authority.
60. Offences by Companies.
61. Compounding of offences.
62. Court for prosecution.
63. Power to summon witnesses and production of
documents.
64. Power to get information.
65. Bar of Jurisdiction.
66. Appearance before authority.
[Act No. 5 of 2005] 5
CHAPTER - IX
GENERAL PROVISIONS
67. Clarification and Advance Rulings.
68. Ongoing contracts.
69. Tax Deferment.
70. Protection of acts done in good faith.
71. Submission of returns by Banks.
72. Provision in the case of defective or irregular
proceedings.
73. Rounding of turnover.
74. Rounding off of tax etc.
75. Powers of subordinate officer to be exercised by higher
authorities.
76. Power to remove difficulties.
77. Instructions to Subordinate Officers.
78. Power to make rules.
79. Power to Amend Schedules.
CHAPTER - X
REPEAL
80. Repeal.
81. Repeal of Ordinance.
Schedule - I.
Schedule - II.
Schedule - III.
Schedule - IV.
6 [Act No. 5 of 2005]
Schedule - V.
Schedule - VI.
THE TELANGANA VALUE ADDED TAX ACT, 2005.1
ACT No.5 OF 2005.
CHAPTER - I
PRELIMINARY
1. (1) This Act may be called the 2Telangana Value Added
Tax Act, 2005.
(2) It extends to the whole of the state of 2Telangana.
(3) (a) Sections 1, 2, 17, 18 and 78 shall be deemed to
have come into force with effect from 31 st January, 2005;
and
(b) the remaining provisions shall come into force on
such date as the Government may, by notification, appoint.
2. In this Act unless the context otherwise requires,-
(1) „Additional Commissioner ‟ means any person
appointed to be an Additional Commissi oner of Commercial
Taxes under section 3-A;
(2) „Appellate Deputy Commissioner ‟ means any
person appointed under section 3 -A to be an Appellate
Deputy Commissioner or any other officer not below the
1. The Andhra Pradesh Value Added Tax Act, 2005 received the assent
of the Governor on the 16 th March, 2005. The said Act in force in the
combined State, as on 02.06.2014, has been adapted to the State of
Telangana, under section 101 of the Andhra Pradesh Reorganisation
Act, 2014 (Central Act 6 of 2014) vide. the Notification issued in
G.O.Ms.No.32, Revenue (C.T.II) Department, dated 15.10.2014.
2. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Department, dated
15.10.2014.
Short title, extent
and
commencement.
Definitions.
2 [Act No.5 of 2005]
rank of Deputy Commissioner authorized by the
Commissioner to be an Appellate Deputy Commissioner;
(3) „Appellate Tribunal ‟ means the Appellate Tribunal
appointed under section 3;
3[(4) „Assessing authority ‟ means any officer of the
Commercial Taxes Department , authorized by the
Commissioner or as may be prescribed , to make any
assessment in such area or areas or the whole of the State
of 4Telangana;]
(5) „Assistant Commissioner ‟ means any person
appointed to be an Assistant Commissioner of Commercial
Taxes under section 3-A;
(6) „Business‟ includes:
(a) any t rade, commerce or manufacture or 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 or
undertaken with a motive to make gain or profit and whether
or not any gain or profit accrues therefrom;
(b) any transaction in connection with, or incidental or
ancillary to, such trade, commerce, manufacture, adventure
or concern; and
(c) any transaction in connection with
commencement or incidental or ancillary to the
commencement or closure of such trade, commerce,
manufacture, adventure or concern;
3. Substituted by Act No.21 of 2011.
4. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Department, dated
15.10.2014.
[Act No.5 of 2005] 3
Explanation:- For the purpose of this clause-
(i) the activities of raising of manmade forests or
rearing of seedlings or plants shall be deemed to b e
business;
(ii) any transaction of sale or purchase of capital
goods pertaining to such trade, commerce, manufacture,
adventure or concern shall be deemed to be business;
(iii) a sale by a person whether by himself or
through an agent of agricultu ral or horticultural produce
grown by himself or grown on any land whether as owner or
tenant in a for m not different from the one in which it was
produced, save mere cleaning, grading or sorting does not
constitute business;
(7) „Casual trader ‟ means a person who, whether as
principal, agent or in any other capacity, carries on
occasional transactions of a business nature involving the
buying, selling or distribution of goods in the State; whether
for cash or for deferred payment, or for commiss ion,
remuneration or other valuable consideration;
(8) „Commissioner‟ means any person appointed by
the Government to be the Commissioner of Commercial
Taxes under section 3-A;
(9) „Commercial Tax Officer ‟ means any person
appointed to be Commercial Tax Officer under section 3-A;
(10) „Dealer‟ means any person who carries on the
business of buying, selling, supplying or distributing goods
or delivering goods on hire purchase or on any system of
payment by instalments, or carries on or executes any
works contract involving supply or use of material directly or
otherwise, whether for cash or for deferred payment, or for
4 [Act No.5 of 2005]
commission, remuneration or other valuable consideration,
and includes,-
(a) a company , a Hindu undivided family or any
society including a co -operative society, club, firm or
association which carries on such business;
(b) a society including a co -operative society, club,
firm or association which buys goods from, or sells, supplies
or distributes goods to its members;
(c) a casual trader, as hereinbefore defined;
(d) any person, who may, in the course of business of
running a restaurant or an eating house or a hotel by
whatever name called, sells or supplies 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;
(e) any person, who may transfer the right to the use
of any goods for any purpose whatsoever whet her or not for
a specified period in the course of business to any other
person;
(f) a commission agent, a broker, a delcredere agent,
an auctioneer or any other mercantile agent, by whatever
name called, who carries on the business of buying, selling,
supplying or distributing goods on behalf of any principal
5[or principals];
Explanation I: Every person who acts as an agent of a
non-resident dealer ‟ that is, as an agent on behalf of a
dealer residing outside the State, and buys, sells, supplies
5. Added by Act No.28 of 2008.
[Act No.5 of 2005] 5
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 goods or documents of title
relating to goods; or
(iii) an agent for the collection or the payment of the
sale price of goods or as a guarantor for such collection or
payment and every local branch of a firm or company
situated outside the State; shall be deemed to be a dealer
for the purpose of the Act;
Explanation II: Where a grower of agricultural or
horticultural produce sells such produce grown by h imself
on any land in which he h as an interest whether as owner ,
usufructuary mortgagee, tenant or otherwise, in a form
different from the one in which it was produced after
subjecting it to any physical, chemical or any process other
than mere cleaning, g rading or sorting, he shall be deemed
to be a dealer for the purpose of the Act;
Explanation III: The Central Government or the State
Government 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 considera tion
shall be deemed to be a dealer for the purposes of the Act;
Explanation IV: Each of the following persons and
bodies, whether or not in the course of business, who sells
or disposes of any goods including unclaimed or
confiscated or unserviceable go ods or scrap, surplus, old,
obsolete, or discarded material or waste products whether
by auction or otherwise, directly or through an agent for
Central Act III of 1930.
6 [Act No.5 of 2005]
cash, or for deferred payment or for any other valuable
consideration shall be deemed to be a dealer to the exte nt
of such disposals or sales, namely,-
(i) Port Trust;
(ii) Municipal Corporation s, Municipal Councils, and
other local authorities;
(iii) Railway authorities;
(iv) Shipping, transport and construction companies;
(v) Air transport companies and air -lines including
National Airport Authority;
(vi) Transporters holding permits for transport
vehicles granted under the Motor Vehicles Act, 1988 which
are used or adopted to be used for hire;
(vii) Telangana State Road Transport Corporation;
(viii) Customs Department of the Government of India
administering the Customs Act, 1962;
(ix) Insurance and financial corporations or
companies and Banks included in the Second Schedule t o
the Reserve Bank of India Act, 1934;
(x) Advertising agencies;
(xi) Any other Corporation, company, body or
authority owned or set up by or subject to administrative
control of the Central Government or any State Government;
Central Act 52 of 1962.
Central Act 59 of 1988.
Central Act 2 of 1934.
[Act No.5 of 2005] 7
Explanation V:- Save as otherwise expressly provi ded
for under the Act the word „dealer‟ shall includ e a VAT
dealer and a TOT dealer;
(11) „Deputy Commercial Tax Officer ‟ means any
person appointed to be a Deputy Commercial Tax Officer
under section 3-A;
(12) „Deputy Commissioner ‟ means any person
appointed to be a Deputy Commissioner of Com mercial
Taxes under section 3-A;
(13) „Exempt sale‟ means a sale of goods on wh ich no
tax is chargeable, and consequently no credit for input tax
related to that sale is allowable;
(14) „Exempted Turnover‟ means the aggregate of sale
prices of all goods exempted under the Act and full or part
of the actual value or fair market value of all transactions not
taxable under the provisions of the Act, including
transactions f alling under section 6A of the 6[Central Sales
Tax Act, 1956];
(15) „Fair market value‟ means the price that the goods
would ordinarily fetch on sale in the open market on the
date of sale or dispatch or transfer of such goods;
(16) „Goods‟ means all kinds of movable property other
than newspapers, actionable claims, stocks, shares and
securities, and includes all materials, articles and
commodities including the goods as goods or in some other
form, involved in the execution of a works contract or those
goods used or to be used in the construction, fitting out,
improvement or repair of mov able or immovable property
and also includes all growing crops, grass and things
6. Substituted by Act No.23 of 2005.
Central Act 7 of 1956.
8 [Act No.5 of 2005]
attached to or forming part of the land which are agreed to
be severed before sale or under the contract of sale;
(17) „Goods vehicle ‟ means any motor vehicle
constructed or adapted for the carriage of goods, or any
other motor vehicle not so constructed or adapted when
used for the carriage of goods solely or in addition to
passengers and also includes every wheeled conveyance;
(18) „Government‟ means the State Government of
7Telangana;
(19) „Input tax‟ means the tax paid or payable under the
Act by a VAT dealer 8[whether directly by himself or through
his agent on his behalf] to another VAT dealer on the
purchase of goods in the course of business;
(20) „Joint Commissioner ‟ means any person
appointed to be a Joint Commissioner of Commercial Taxes
under section 3-A;
(21) „Notification‟ means a notification published in the
7Telangana Gazette and the word „notified‟ shall be
construed accordingly;
(22) „Output tax ‟ means the tax pa id or payable by a
VAT dealer 8[whether by himself or through his agent] on
the sale of goods to another VAT dealer or any other
person;
(23) „Place of business ‟ means any place where a
dealer purchases or sells goods and includes,-
7. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Department, dated
15.10.2014.
8. Inserted by Act No.28 of 2008.
[Act No.5 of 2005] 9
(a) any warehouses, godown or other place where
goods are stored or processed or produced or
manufactured; or
(b) any place where a dealer keeps his books of
accounts; or
(c) any place where business is carried on through an
agent by whatever name called, the place of business of
such agent;
(24) „Prescribed‟ means prescribed by the Rules made
under the Act;
(25) „Purchase Price ‟ means the amount of valuable
consideration paid or payable by a person for any purchase
made including any sum charged for anything done by the
seller in respect of the goods at the time of or before
delivery thereof;
Explanation I: - Where the purchase is effected by way
of transfer of property in goods (whether as goods or in
some other form) involved in the execution of works
contract, purchase price shall mean the total consideration
for the works contract, and for the purpose of levy of tax
purchase price shall be taken to mean the price as may be
determined in accordance with the rules, by making such
deductions from the total consideration for the works
contract as may be prescribed;
Explanation II: - The amount of duties levied or leviable
on the goods under the Central Excise Act, 1944, or the
Customs Act, 1962 shall be deemed to be part of the
purchase 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;
Central Act 1 of 1944.
Central Act 52 of 1962.
10 [Act No.5 of 2005]
Explanation III: - Purchase price shall not include tax
paid or payable by a person in respect of such purchase;
(26) „Return‟ means any return required to be furnished
under the Act or the Rules made thereunder;
(27) „Rules‟ means rules made under the Act;
(28) „Sale‟ with all its grammatical variations and
cognate expressions means every transfer of the property in
goods [whether as such goods or in any other form in
pursuance of a contract or otherwise] by one person to
another in the course of trade or business, for cash, or tor
deferred payment, or for any other valuable consideration or
in the supply or distribution of goods by a society (including
a co -operative society), club , firm or association to its
members, but does not include a mortgage, hypothecation
or pledge of, or a charge on goods;
Explanation I: - A delivery of goods on the hire
purchase or any system of payment by insta lments shall,
notwithstanding the fact that the seller retains the title in the
goods, as security for payment of th e price, be deemed to
be a sale;
Explanation II:- (a) Notwithstanding anything contained
in the Indian Sale of Goods Act, 1930 a sale or purchase of
goods shall be deemed, for the purpose of the Act to have
taken place in the State, wherever the contract of sale or
purchase might have been made, if the g oods are within the
State,-
(i) in the case of specific or ascertained goods, at
the time the contract of sale or purchase is made; and
(ii) in the case of unascertained or future goods, at
the time of their appropriation to the contract of sale or
Central Act III of 1930.
[Act No.5 of 2005] 11
purchase by the seller or by the purchaser, whether the
assent of the other party is prior or subsequent to such
appropriation;
(b) Where there is a single contract of sale or
purchase of goods situated at more places than one, the
provisions of clause (a) shall apply as if there were separate
contracts in respect of the goods at each of such places;
Explanation III:- Notwithstanding anything contained in
the Act or in the Indian Sale of Goods Act, 1930 two
independent sales or purchases shall for the purposes of
the Act, be deemed to have taken place,-
(1) When the goods are transferred from a principal to
his selling agent and from the selling agent to his purchaser,
or
(2) When the goods are transferred from the seller to a
buying agent and from the buying agent to his principal, if
the agent is found in either of the cases aforesaid,-
(i) to have sold the goods at one rate and to have
passed on the sale proceeds to his principal at another rate;
or
(ii) to have purchased the goods at one rate and to
have passed them on to his principal at another rate; or
(iii) not to have accounted to his principal for the
entire collections or deductions made by him, in the sales or
purchases effected by him on behalf of his principal; or
(iv) to have acted for a ficti tious or non -existent
principal;
Central Act III of 1930.
12 [Act No.5 of 2005]
Explanation-IV:- A transfer of right to use any goods for
any purpose (whether or not for a specified period) for cash,
deferred payment or other valuable considerati on shall be
deemed to be a sale;
Explanation-V:- Notwithstanding anything contained in
the Act or in the Indian Sale of Goods Act, 1930 the sale of
goods includes the supply, by way of or as part of any
service or in any manner whatsoever, of goods, being food
or other article for human consumption or a ny drink
(whether or not intoxicating) where such supply or service,
is for cash, deferred payment or other valuable
consideration and such supply of any goods shall be
deemed to be a sale of those goods by the person making
the supply of those goods to th e per son to whom such
supply is made;
Explanation-VI:- Whenever any goods are supplied or
used in the executing of a works contract, there shall be
deemed to be a transfer of property in such goods, whether
or not the value of the goods so supplied or us ed in the
course of execution of such works contract is shown
separately and whether or not the value of such goods or
material can be separated from the contract fo r the service
and the work done;
Explanation-VII:- Notwithstanding anything contained in
the Indian Sale of Goods Act, 1930, a sale or purchase of
goods shall, for the purposes of the Act be deemed to have
taken place where in the course of any scheme whether
called as “Lucky Gift Scheme ” or by any other n ame, any
goods are transferred by the person who runs such scheme
to any other person who is a subscriber to that scheme,
provided that all the subscribers to the scheme have agreed
to contribute a specific sum periodically or otherwise,
towards the cost of any article agreed to be sold or given to
the winner of the draw held by the holder of the scheme;
Central Act III of 1930.
Central Act III of 1930.
[Act No.5 of 2005] 13
and the turnover for the purpose of this Explanation shall be
the amount which would have been payable by the
subscriber had he not won the prize till the end of the series
of draw;
Explanation-VIII:- Every transfer of property in goods by
the Central Government or the State Government for cash or
for deferred payment or for any other valuable
consideration, whether or not in the course of business shall
be deemed to be a sale for the purpose of the Act;
(29) „Sale Price‟ means,-
(a) the total amount set out in the tax invoice or bill of
sale; or
(b) the total amount of consideration for the sale or
purchase of goods as may be determined by the assessing
authority, if the tax invoice or bill of sale does not set out
correctly the amount for which the goods are sold; or
(c) if there is no tax invoice or bill of sale, the total
amount charged as the consideration for the sale or
purchase of good s by a VAT dealer or TOT dealer either
directly or through another, on his own account or on
account of others, whether such consideration be cash,
deferred payment or any other thing of value and shall
include,-
(i) the value of any goods as determ ined by the
assessing authority,-
(a) to have been used or supplied by the dealer in
the course of execution of the works contract; or
(b) to have been delivered by the dealer on hire
purchase or any other system of payment by instalments; or
14 [Act No.5 of 2005]
(c) to have been supplied or distributed by a society
including a Co -operative Society, Club, firm or association
to its members, where the cost of such goods is not
separately shown or indicated by the dealer and where the
cost of such goods is separately shown or indicated by the
dealer, the cost of such goods as shown or indicated;
(ii) any other sum charged by the dealer for anything
done in re spect of goods sold at the time of, or before , the
delivery of the goods;
(iii) any other sum charged by the de aler, whatever
be the description, name or object thereof;
Explanation-I:- Subject to such conditions and
restrictions, if any, as may be prescribed in this behalf, any
cash or other discount on the price allowed in respect of any
sale and any amount refunded in respect of articles returned
by customers shall not be included in the sale price;
Explanation-II:- For the purpose of determination of
sale price and levy of Value Added Tax, the Value Added
Tax charged or chargeable shall not form part of sale price;
9[Explanation-III:- For the purpose of determination of
sale price of Foreign Liquor imported by the Telangana
Beverages Corporation Limited and levy of Value Added
Tax, the „Customs Duty ‟ charged or chargeable under the
Customs Act, 1962 shall not form part of the sale price.]
(30) „Schedule‟ means a Schedule appended to the
Act;
9. Added by Act No.9 of 2010.
[Act No.5 of 2005] 15
10[(30-A) „SEZ‟ means Special Economic Zone as
defined under the Special Economic Zones Act, 2005;]
(31) „Special Rate of Tax ‟ means the rates of tax
specified in Schedule-VI;
(32) „State‟ means the State of 11Telangana;
(33) „State Representative ‟ means an officer of the
Commercial Taxes Department not below the rank of
Assistant Commissioner appointed by the State Government
to receive on their behalf notices issued by the Appellate
Tribunal and generally to appear, act and plead on their
behalf in all proceedings before the Appellate Tribunal and
includes an officer authorized to act on his behalf in his
absence;
(34) „Tax‟ means a tax on the sale or purchase of
goods payable under the Act and includes,-
(a) a tax on the transfer, otherwise than in pursuance
of a contract, of property in any goods for cash, deferred
payment or other valuable consideration;
(b) a tax o n the transfer of property in goods whether
as goods or in some other form involved in the execution of
a works contract;
(c) a tax on the delivery of goods on hire purchase or
any system of payment by instalments;
(d) a tax on 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;
10. Inserted by Act No.28 of 2008.
11. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Department, dated
15.10.2014.
Central Act 28 of 2005.
16 [Act No.5 of 2005]
(e) a tax on the supply of goods by any un -
incorporated association or body of persons to a member
thereof for cash , deferred payment or other valuable
consideration;
(f) a tax on 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, wh ere such supply or
service is for cash, deferred payment or other valuable
consideration;
(35) „Tax invoice‟ means a sale invoice containing such
details as may be prescribed and issued by a VAT dealer to
another VAT dealer;
(36) „Tax period‟ means a calendar month or any other
period as may be prescribed;
(37) „Taxable Sale ‟ means a sale of goods taxable
under the Act and under the Central Sales Tax Act, 1956
and shall include sale of any goods exported outside the
territory of India or sold in the course of export;
(38) „Taxable turnover ‟ means the aggregate of sale
prices of all taxable goods;
Explanation-I:- For the purpose of a VAT dealer, it shall
not include the amount of VAT paid or payable but shall
include the sale price of zero-rated sales;
Explanation-II:- The sale price rela ting to second and
subsequent sale of goods specified in Schedule VI shall not,
form part of taxable turn over;
Central Act 74 of 1956.
[Act No.5 of 2005] 17
12[Explanation-III:- The Sale price, relating to loose
liquor, served to customer in a bar/restaurant which was
derived from the goods enumerat ed in item 1 of the
Schedule-VI, on which tax at special rates has been levied
and paid in the State, shall not form part of the taxable
turnover;]
13[(39) „Total turnover ‟ means the aggregate of sale
prices of all goods, taxable and exempted, sold at all places
of business of the dealer in the State, whether directly by
himself or through his agent or agents, including the
turnover of sales involved in the transactions fall ing under
sections 3, 5, 6A and 8(6) of the Central Sales Tax Act, 1956
and shall also include the gross consideration received or
receivable towards execution of works contract;]
(40) „Turnover tax‟ or „TOT‟ means a tax on the taxable
turnover of dealer s registered or liable to be registered for
TOT;
(41) „Turnover Tax Dealer ‟ or „TOT‟ dealer means any
dealer who is registered or liable to be registered for TOT;
(42) „VAT‟ means Value Added Tax on sales, levied
under the provisions of the Act;
(43) „VAT dealer ‟ means a dealer who is registered for
VAT;
(44) „Vessel‟ includes any ship, barge, boat, raft,
timber, bamboos or floating materials propelled in any
manner;
12. Added by Act No.21 of 2011.
13. Substituted by Act No.28 of 2008.
18 [Act No.5 of 2005]
(45) „Works Contract ‟ includes any agreement for
carrying out for cash or for deferred payment or for any
other valuable considerati on, the building construction,
manufacture, processing, fabrication, erection, in stallation,
laying, fitting out, improvement, modification, repa ir or
commissioning of any movable or immovable property;
(46) „Year‟ means the twelve -month period ending on
the thirty first day of March;
(47) „Zero Rated Sales ‟ for the purpose of the Act,
means a sale of goods in the course of inter -State trade or
commerce, exports to outside the territory of India including
sale in the course of export and sale of goods to any unit
located in Special Economic Zone as may be notified.
CHAPTER - II
APPELLATE TRIBUNAL AND APPOINTMENT OF OFFICERS
3. (1) The Government shall appoint an Appellate Tribunal
consisting of a Chairman and two other members to
exercise the functions conferred on the Appellate Tribunal
by or under the Act. The Chairman shall be a judicial o fficer
not below the rank of a 14[District Judge Super Time
Scale/District Judge Selection Grade] and of the other two
members, one shall be an officer of the State Government
not below the rank of a Joint Commissioner of Commercial
Taxes and the other shal l be a n officer of the Indian
Revenue Service not below the rank of an Additional
Commissioner.
(2) Any v acancy in the membership of the Appellate
Tribunal shall be filled up by the Government.
14. Substituted by Act No.34 of 2006.
Appellate
Tribunal.
[Act No.5 of 2005] 19
(3) Notwithstanding anything contained in sub -section
(1), the Government may at any time, by order, constitute an
additional Bench of the Tribunal, consisting of a Chairman
who shall be a 15[District Judge Super Time Scale/District
Judge Selection Grade] and two members of whom one
shall be an officer of the St ate Government not below the
rank of a Joint Commissioner of Commercial Taxes and the
other shall be an officer of the Indian Revenue Service not
below the rank of an Additional Commissioner to function at
such place and for such period as may be specified herein.
(4) Where any orders passed by the Benches specified
in sub-sections (1) and (3) are in conflict with each other on
same issue the senior Chairman of the two Benches, on
application or suo -motu shall constitute and preside over a
full Bench of not less than five members in the manner
specified in the regulations made under sub -section (5) and
the decision of such Bench shall be final.
(5) The Appellate Tribunal shall, with the previous
sanction of the Government make regulations consistent
with the provisions of the Act and rules made thereunder, for
regulating its procedure and the disposal of its business .
Such regulations shall be published in the 16Telangana
Gazette.
17[(6) (a) The function s of the Appe llate Tribunal may
be exercised,-
(i) by a Bench consisting of all the members of the
Appellate Tribunal; or
15. Substituted by Act No.34 of 2006.
16. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Depa rtment, dated
15.10.2014.
17. Added by Act No.34 of 2006.
20 [Act No.5 of 2005]
(ii) by a Bench consisting of two members
constituted by the chairman; or
(iii) by a Bench consisting of the Chairman and
another member as constituted by the Chairman; or
(iv) by a Bench consisting of the other two
members in case the Chairman is absent or on leave or
transfer or in case of the office of the Chairman is vacant
otherwise; or
(v) by a single member of the Appellate Tribunal
constituted by the Chairman in cases where the turnover
does not exceed rupees five lakhs;
Explanation:- The single member referred to in item (v)
above may be either the Chair man himself or any other
member;
(b) Where an appeal or application is heard by all the
three members of the Appellate Tribunal, and the members
are divided in opinion, on any point or points , such point or
points shall be decided in accordance with the opinion of
the majority;
(c) Where an appeal or app lication is heard by a
Bench consisting of two members whether it consists of the
Chairman or not, and the members are divided in opinion,
on any point or points, such point or points shall be referred
to the Appellate Tribunal consisting of all the three
members;
(d) 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 may in his or its discretion, reserve
[Act No.5 of 2005] 21
such case for decision by a Bench of which the Chairman
shall be a member.]
3-A. The State Government, may, appoint a Commissioner
of Commercial Taxes and as many Additional
Commissioners of Commercial Taxes, Joint Commissioners
of Commercial Taxes, Appellate Deputy Commissioners of
Commercial Taxes, Deputy Commissioners of Commercial
Taxes, Assistant Commissioners of Commercial Taxes,
Commercial Tax Office rs and Deputy Commercial Tax
Officers as they think fit, for the purpose of pe rforming the
functions respectively conferred on them by or under the
Act. Such officers shall perform the said functions within
such area or areas or the whole of the State of 18Telangana
as the Government or any authority or officer empowered by
them in this behalf may assign to them.
CHAPTER - III
INCIDENCE, LEVY AND CALCULATION OF TAX.
4. (1) Save as otherwise provided in the Act, every dealer
registered or liable to be registered as a Value Added Tax
dealer shall be liable to pay tax on every sale of goods in the
State at the rates specified in the Schedules.
19[(2) Every dealer Who has not opted for registration
as a Value Added Tax dealer and who is registered or liable
to be registered for Turnover Tax , shall pay tax at the rate o f
one percent (1%) on the taxable turnover in such manner as
may be prescribed.]
18. Substituted by G.O.Ms.No.32, Revenue (C.T.II) Department, dated
15.10.2014.
19. Substituted by Act No.4 of 2009.
Charge to tax.
Appointment of
Officers.
22 [Act No.5 of 2005]
(3) Every Value Added Tax dealer shall pay tax on
every sale of goods taxable under the Act on the sale price
at the rates specified in the Schedules III, IV and V subject to
the provisions of section 13.
(4) Every Value Added Tax dealer, who in the course of
his business purchases any taxable goods from a person or
a dealer not registered as a Value Added Tax dealer or from
a Value Added Tax dealer in circumstances in wh ich no tax
is payable by the selling Value Added Tax deal er, shall be
liable to pay tax 20[at the rate of five percent (5%)] on the
purchase price of such goods, if after such purchase, the
goods are,-
(i) used as inputs for goods which are exempt from
tax under the Act; or
(ii) used as inputs for goods, which are disposed of
otherwise than by way of sale in the State or dispatched
outside the State otherwise than by way of sale in the
course of inter -State trade and commerce or export out of
the territory of India; or
(iii) disposed of otherwise than by way of
consumption or by way of sale either within the State or in
the course of inter -State trade or commerce or export out of
the territory of India:
21[Provided that wherever a common input is used to
produce goods, the turnover, taxable under this sub -
section, shall be the value of the inputs, proportionate to the
value of the goods, used or disposed of in the manner a s
prescribed under this section:
20. Substituted by Act No.12 of 2012.
21. Substituted by Act No.28 of 2008.
[Act No.5 of 2005] 23
Provided further that in respect of p urchase of goods
specified in Schedules III and VI, the VAT dealer shall be
liable to pay tax at the rates specified for such goods in the
respective Schedules.]
(5) Every dealer shall pay tax on the sale price of
goods specified in Schedule VI at the sp ecial rates and at
the point of levy specified therein.
(6) Every casual trader who sells goods within the State
and any dealer covered under Explanation III and IV of
clause (10) of section 2 shall pay tax on the sale price of
such goods at the rates sp ecified in the respective
Schedules.
(7) Notwithstanding anything contained in the Act,-
(a) every dealer executing works contract shall pay
tax on the value of goods at the time of incorporation of
such goods in the works executed at the rates applicable to
the goods under the Act:
Provided that where accounts are not maintained to
determine the correct value of goods at the time of
incorporation such deale r shall pay tax at the rate
22[specified in Schedule-V] on the total consideration
received or receivable subject to such deductions as may
be prescribed;
23[(b) Every dealer executing works contract may in
lieu of the amount of tax payable by him under clause (a)
opt to pay by way of composition 24[at the rate of five
percent (5%)] of the t otal amount received or receivable by
himself towards execution of the works contract either by
22. Substituted by Act No.9 of 2010.
23. Substituted by Act No.21 of 2011.
24. Substituted by Act No.12 of 2012.
24 [Act No.5 of 2005]
himself or though sub -contractor subject to such conditions
as may be prescribed:
Provided that the sub -contractor, executing works
contract on behalf of the contractor, who opts to pay tax
under this clause, shall be exempted from levy of tax.]
25[(c) [XXX]]
26[(d) Every dealer engaged in construction and
selling of residential apartments, houses, buildings or
commercial complexes may, in lieu of the amount of tax
payable by him under clause (a) opt to pay tax by way of
composition 27[at the rate of five percent (5%)] on twenty five
percent (25%) of the amount, received or receivable towards
the composite value of both the land and building or the
market value fixed there for for the purpose of stamp duty,
whichever is higher, subject to such conditions as may be
prescribed:
Provided that, no tax shall be payable by the sub -
contractor of a works contractor, who opts to pay and paid
tax under this clause on the turnover relating to the amount
received as a sub -contractor from such main contractor
towards the execu tion of works contract, whether wholly or
partly, subject to the production of evidence to prove that
such main contractor has exercised such option in respect
of the specific work and subject to such other co nditions as
may be prescribed.]
28[(e) [XXX]]
25. Clause (c) omitted by Act No.21 of 2011.
26. Substituted by Act No.21 of 2011.
27. Substituted by Act No.12 of 2012.
28. Clause (e) omitted by Act No.21 of 2011.
[Act No.5 of 2005] 25
29[(f)] 30[any dealer registered or is liable to be
registered] for Turnover Tax and executing any works
contracts shall pay tax at the rate of 1% on total value of the
goods at the time of incorporation of the goods used:
Provided that where accounts are not maintained to
determine the correct value of the goods at the time of
incorporation, such dealers shall pay tax at the rate of 1%
the total c onsideration received or receivable subject to
such deductions as may be prescribed;]
31[XXX]
32[(g) notwithstanding anything contained in clauses
(a) to (f) above, no tax shall be leviable on the turnover of
transfer of property in goods whether as goods or in some
other form involved in the execution of works contract, if
such transfer from the con tractor to the contractee
constituted a sale in the course of inter -State trade or
commerce under section 3 or a sale outside the State under
section 4, or a sale in the course of import or export under
section 5 of the Central Sales Tax Act, 1956;
(h) no tax shall be payable under 33[clause (a)] of this
sub-section on the turnover relating to amounts paid to a
sub-contractor as consideration for the execution of works
contract whether wholly or partly subject to the production
of proof that such sub -contractor is registered as a Value
Added Tax dealer under the Act and the turnover of such
amount is included in the return prescribed filed by such
sub-contractor.]
29. Existing clause (e) renumbered as (f) and second proviso is added
by Act No.23 of 2005.
30. Substituted by Act No.21 of 2011.
31. Second proviso omitted by Act No.5 of 2007.
32. Clauses (g) and (h) added by Act No.5 of 2007.
33. Inserted by Act No 39 of 2007 and substituted by Act No. 21 of 2011.
26 [Act No.5 of 2005]
34[(i) [XXX]]
(8) Every Value Added Tax dealer who transfer s the
right to use goods taxable under the Act for any purpose
whatsoever, whether or not for a specified period, to any
lessee or licensee for cash, deferred payment or other
valuable consideration, in the course of his business shall,
on the total amount realized or realizable by him by way of
payment in cash or otherwise on such transfer of right to
use such goods from the lessee or licensee pay a tax for
such goods at the rates specified in the Schedules.
35[(8A) Notwithstanding anything contained in sub-
section (8), a producer of a feature film, who transfers the
right to use the film to the distributors or the exhibitors for
the purpose of exhibiting such films in the theatres, may opt
to pay tax by way of composition as may be prescribed.
Explanation:- wherever tax is paid under sub -section
(8A) by any producer in respect of any film, the subsequent
transfer of right to use such film for exhibition in the theatre
shall not be liable to tax under sub-sections (8) and (8A).]
36[(8B) Any dealer other than the producer of a feature
film may, in lieu of the tax payable by him under sub -section
(8), opt to pay by way of composition an amount of tax 37[at
the rate of five percent (5%)] of the total amount, received or
receivable by him towards transfer of right to use any goods
subject to the conditions, as may be prescribed:
Provided that, wherever the tax is paid under this sub -
section, the subsequent transfer of right to use such goods
shall not be liable to tax under sub-section (8).]
34. Clause (iExcerpt shown. Open the full act in Lexace.