KVAT Act 6

Section 6 · Levy of tax on sale or purchase of goods

(1)

Every dealer whose total turnover for a year is not less than ten lakh rupees and every importer or casual trader or agent of a non-resident dealer, or dealer in jewellery of gold, silver and platinum group metals or silver articles or contractor or any State Government, Central Government or Government of any Union Territory or any department thereof or any local authority or any autonomous body whatever be his total turnover for the year, shall be liable to pay tax on his sales or purchases of goods as provided in this Act. The liability to pay tax shall be on the taxable turnover, -

(a)

in the case of goods specified in the Second and Third Schedules at the rates specified therein and at all points of sale of such goods within the State and in the case of aerated branded soft drinks excluding soda at the rate of twenty per cent at all points of sale within the State.

(b)

Omitted.

(c)

in the case of transfer of the right to use any goods for any purpose whether or not for a specified period, at the rate of four percent at all points of such transfer;

(d)

in the case of goods not falling under clauses (a) or (c) at the rate of 12.5% at all points of sale of such goods within the State. Government may notify a list of goods taxable at the rate of 12.5%;

(e)

in the case of transfer of goods involved in the execution of works contract where transfer is in the form of goods, at the rates specified for such goods in clauses (a) or (d) above, as the case may be;

(f)

In the case of transfer of goods involved in execution of works contract, where the transfer is not in the form of goods, but in some other form, at the rate of 12.5 per cent and when the transfer is in the form of goods at the rates prescribed under the respective Schedules.

Provided that where the sale is to the Administrator, Union Territory of Lakshadweep, Laccadive Co-operative Marketing Federation, Kozhikode or the Lakshadweep Harbour Works and registered dealers certified by the Administrator, Union Territory of Lakshadweep, the tax payable under clause (d) shall be at the rate of four per cent, subject to such conditions as may be prescribed:Provided further that a bar attached hotel, as defined under explanation to clause (c) of section 8 or a dealer in petroleum products shall be liable to pay tax under this sub-section if his total turnover under this Act and the total turnover under the Kerala General Sales Tax Act, 1963 (

15 of 1963

) together is not less than the limit specified under this sub-section:Provided also that where the total turnover of a dealer, other than an importer or casual trader or agent of a non-resident dealer or dealer in jewellery of gold, silver and platinum group metals and silver articles or contractor, exceeds ten lakh rupees for the first time during the course of an year, such dealer shall be liable to pay tax under this sub- section only on the turnover in excess of ten lakh rupees; but he shall be liable to pay tax irrespective of the total turnover in any subsequent year :Provided also that in respect of works contracts executed under the Sampurna Gramin Rosghar Yojana or the beneficiary committees using the Member of Parliament / Member of Legislative Assembly Funds or Natural Calamity Relief Funds or Sarva Siksha Abhiyan Funds, or funds of Local Authorities or Command Area Development Authority or execution of work under Jalanidhi Project (KRWSA) and OFD Works through Beneficiary Farmers' Associations or Karshaka Samithy where the total amount in respect of individual contract does not exceed ten lakhs rupees, the tax payable under clause (f) above shall be four per cent and the beneficiary committees shall be entitled to receive payment even without taking registration under the Act.Provided also that where:

(a)the sale is to or by Military, Naval, Air Force or NCC Canteen, Indian Naval Canteen Service and Canteen Stores Department, and

(b)in case of motor vehicles, the sale is to defense personnel or exservicemen on production of authorization duly issued by the authorized officer of the Canteen Stores Department, the tax payable under (a) or (d) above shall subject to such conditions and restrictions as may be prescribed be half the rate applicable to such goods

Provided also that in respect of sale of fuel and lubricants to foreign-going vessels, other than fishing vessels, the tax payable under clause (a) or (d) above shall, subject to conditions and restrictions as may be prescribed, be half per cent:Provided also that where sale of goods other than petroleum products, manufactured in the State is to Railways, Kerala State Electricity Board, Kerala State Road Transport Corporation or Kerala Water Authority, the tax payable under clause (d) above shall, subject to such conditions and restrictions as may be prescribed, be at four per cent.;Provided also that sculptural statues of national leaders and social reformers shall be exempted from tax payable under clauses (e) and (f) of sub-section (1) of section 6:Provided also that the tax payable under clause (f ), in respect of transfer of declared goods not in the form of goods but in some other form, shall be at the rate prescribed under the respective Schedules:Provided also that the rate of tax on the sale of used motor vehicles shall be at 0.5 per cent and that no tax is payable under sub-section (2):Provided also that, in respect of cinematographic films, turnover relating to sale of "copyright" under clause (a) and transfer of right to use under clause (c) shall be exempted.;

(1A)

Notwithstanding anything contained in sub-section (1),-

(a)

where a dealer whose total turnover for a year is below the limit specified in sub-section (1) collects tax under section 30 on his sales, he shall, whatever be his total turnover for the year, be liable to pay tax under sub-section (1) on the taxable turnover for the year.

(b)

where the sale of any goods is exempted at the point of sale by any dealer, such dealer may, at his option, pay tax in respect of the sale of such goods and thereupon he shall, whatever be his total turnover, be liable to pay tax on the taxable turnover for the year.

(2)

Notwithstanding anything contained in sub-section (1),-

(a)

every dealer who purchases taxable goods from any person other than a registered dealer shall pay tax on the purchase turnover of goods at the rates specified under sub- section (1).

(b)

every dealer who purchases taxable goods from any registered dealer other than a dealer liable to tax under this Act and despatches the goods to any place outside the state otherwise than by way of sale in the course of interstate trade or export shall pay tax on the purchase turnover of the goods at the rates specified under sub-section (1), provided that the maximum rate leviable under this clause shall not exceed four per cent:

Provided that a dealer, other than an importer, casual trader, agent of non-resident dealer, dealer in jewellery of gold, silver and platinum group metals or silver articles or contractor or any State Government, Central Government or Government of any Union Territory or any department thereof or any local authority or autonomous body shall not be liable to tax under this sub-section if his total turnover is less than five lakh rupees.Provided further that Khadi and Village Industrial Units manufacturing splints and veneers shall not be liable to tax under this subsection on the turnover of purchase of softwood effected from unregistered dealers for the years 2005-06 and 2006-07.

(c)

every awarder, not being a Government department or Local Authority, who purchases taxable goods from any person, other than a registered dealer, within the State for execution of works contract and issues the same for incorporation in the work, without including its value in the gross contract amount, shall pay tax on the purchase turnover of such goods at the rates specified under sub-section (1), if the cost of the work including the value of materials supplied by the awarder exceeds one crore rupees.

(3)

Omitted.

(4)

Goods specified in the First Schedule shall be exempted from tax.

(5)

Notwithstanding anything contained in sub-section (1), but subject to Sub-section (2), any registered dealer not being,

(a)

an importer; or

(b)

a dealer making any sale in the course of interstate trade or commerce or export; or

(c)

a dealer registered under the Central Sales Tax Act, 1956 (Central Act 74 of 1956); or

(d)

a dealer effecting first taxable sale of goods within the State; or

(e)

a dealer covered by sub-section (1A); or

(f)

a contractor,

whose total turnover for a year is below fifty lakh rupees, may, at his option, pay tax at the rate of half per cent of the turnover of sale of taxable goods as presumptive tax instead of paying tax under subsection (1):Provided that a dealer holding stock of goods purchased in the course of interstate trade on the date of coming into force of the Act, will have the option to pay tax under this sub-section from the beginning of the quarter following the quarter in which he has sold such goods in the state and paid tax under sub- section (1) of section 6 and his registration under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) is cancelled:Provided further that any dealer covered by sub- section (1A) may, at his option pay tax under this sub-section from such period as may be prescribed:Provided also that a dealer shall not be eligible to opt for payment of tax under this sub-section if his total turnover in respect of goods to which this Act applies, whether under this Act or under the Kerala General Sales Tax Act, 1963 (

15 of 1963

) had exceeded fifty lakh rupees during the year preceding the year to which such option relates.Provided also that a dealer shall not be liable to pay presumptive tax under this sub section, if his total turnover is less than ten lakh rupees. Provided also that dealers covered under his sub- section whose total turnover for a year is below rupees twenty lakhs, may pay a lump sum amount of rupees three thousand annually as presumptive tax, and the payment shall be at the rate of rupees seven hundred and fifty per quarter along with a statement as may be prescribed. Such dealers shall also file an annual declaration as may be prescribed.Explanation. - "First taxable sale" for the purpose of this sub- section shall mean the sale of taxable goods effected by a registered dealer immediately after the import of such goods into the State or its manufacture in the State as the case may be, but shall not include the sale of goods in respect of which tax under section 5 or under subsection (4) of section 59 of the Kerala General Sales Tax Act 1963 (

15 of 1963

) had been paid and which are held as opening stock on the date of coming into force of the Act.

(6)

Notwithstanding anything contained in sub-section (1), where goods sold are contained in containers or are packed in any packing materials, the rate of tax and the point of levy applicable to such containers or packing materials, as the case may be, shall, whether the price of the containers or the packing materials is charged separately or not be the same as those applicable to goods contained or packed, and in determining turnover of the goods, the turnover in respect of the containers or packing materials shall be included therein:Provided that where the sale or purchase of goods contained in any containers or packed in any packing materials is exempt from tax, then, the sale or purchase of such containers or packing materials shall also be exempt from tax.Explanation. - For the purposes of sub-section (6), the word "containers" includes gunny bags, tins, bottles or any other containers.

(7)

Notwithstanding anything contained in sub-section (1),

(a)

any authorised retail or wholesale distributor dealing in rationed articles namely, rice, wheat and kerosene under the Kerala Rationing Order, 1966 shall not be liable to pay tax on the turnover of such goods;

(b)

sale of any building materials, industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto to any developer or industrial unit or establishments situated in any Special Economic Zone in the State for setting up the unit or use in the manufacture of other goods shall, subject to such conditions or restrictions, as may be prescribed, be exempted from tax.

(c)

sale of medicines and drugs falling under the Third Schedule, in respect of which tax had been paid under the Kerala General Sales Tax Act, 1963 (

15 of 1963

) and which are held as opening stock on the 1 day of April, 2005 shall, subject to conditions and restrictions, as may be prescribed, be exempted from tax.

Explanation. - For the purpose of this sub-section, Special Economic Zone shall mean a Special Economic Zone approved and notified as such by the Central Government and includes an existing Special Economic Zone.

(8)

The Rules of Interpretation of the Schedules of this Act shall be as set out in the Appendix.

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