TVAT Act 4Chapter 0 · Preliminary

Section 4 · Charge to tax

(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.

(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 of one percent (1%) on the taxable turnover in such manner as may be prescribed.] [Substituted by Act No.4 of 2009.]

(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 which no tax is payable by the selling Value Added Tax dealer, shall be liable to pay tax [at the rate of five percent (5%)] [Substituted by Act No.12 of 2012.] 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:

[Provided that wherever a common input is used to produce goods, the turnover, taxable under this subsection, shall be the value of the inputs, proportionate to the value of the goods, used or disposed of in the manner as prescribed under this section:Provided further that in respect of purchase 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.] [Substituted by Act No.28 of 2008.]

(5)

Every dealer shall pay tax on the sale price of goods specified in Schedule VI at the special 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 specified 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 dealer shall pay tax at the rate [specified in Schedule-V] [Substituted by Act No.9 of 2010.] on the total consideration received or receivable subject to such deductions as may be prescribed;

(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 [at the rate of five percent (5%)] [Substituted by Act No.21 of 2011.] of the total amount received or receivable by himself towards execution of the works contract either by 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.] [Added by Act No.34 of 2006.]

(c)

[ [***]] [Clause (c) omitted by Act No.21 of 2011.]

(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 [at the rate of five percent (5%)] [Substituted by Act No.21 of 2011.] 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 therefor 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 subcontractor 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 execution 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 conditions as may be prescribed.]

(e)

[ [***]] [Clause (e) omitted by Act No.21 of 2011.]

(f)

[] [Existing clause (e) renumbered as (f) and second proviso is added by Act No.23 of 2005.] [any dealer registered or is liable to be registered] [Substituted by Act No.21 of 2011.] 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 consideration received or receivable subject to such deductions as may be prescribed;][***] [Second proviso omitted by Act No.5 of 2007.]

(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 contractor 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; [Clauses (g) and (h) added by Act No.5 of 2007.]

(h)

no tax shall be payable under [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.]

(i)

[ [***]] [Clause (i) omitted by Act No.21 of 2011.]

(8)

Every Value Added Tax dealer who transfers 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.

(8A)

[ Notwithstanding anything contained in subsection (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).] [Inserted by Act No.4 of 2009.]

(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 [at the rate of five percent (5%)] [Added by Act No.21 of 2011.] 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 subsection, the subsequent transfer of right to use such goods shall not be liable to tax under sub-section (8).]

(9)

[ Notwithstanding anything contained in this Act,-

(a)

every dealer, being a star Hotel, having a status of three star and above, as recognized by competent authority prescribed by the Government of India, shall pay tax at the rate [specified in Schedule-V] of the taxable turnover of the sale or supply of goods, being food or any other article for human consumption or drink, served in restaurants, attached to such hotels or anywhere whether indoor or outdoor;

(b)

every dealer, being a Hotel other than those mentioned in clause (a), shall pay tax [at the rate of five percent (5%)] [Substituted by Act No.12 of 2012.] of the taxable turnover of the sale or supply of goods, being food or any other article for human consumption or drink, served in restaurants attached to such hotels or anywhere whether indoor or outdoor;

(c)

every dealer, other than those mentioned in clause (a) and clause (b) and whose annual total turnover is rupees one crore and fifty lakhs (1.5 Crores) and above shall pay tax at the rate [specified in Schedule-V] [Substituted by Act No.9 of 2010.] of the taxable turnover of the sale of supply of goods, being food or any other article for human consumption or drink, served in restaurants, sweet-stalls, clubs, any other eating houses or anywhere whether indoor or outdoor or by caterers;

(d)

every dealer, other than those mentioned in clause (a) and clause (b) and whose annual total turnover is more than [rupees seven lakhs and fifty thousand] [Substituted by Act No.13 of 2012.] and less than rupees one crore and fifty lakhs (1.5 Crore) shall pay tax [at the rate of five percent (5%)] [Substituted by Act No.12 of 2012.] of the taxable turnover of the sale or supply of goods being food or any other article for human consumption or drink served in restaurants, sweet-stalls, clubs, any other eating houses or anywhere whether indoor or outdoor or by caterers.

Explanation: - For the purposes of the computing the total turnover under this sub-section, the sales turnover of all business units in common premises sharing the common kitchen or common employees shall be added to the sales turnover of the business unit having higher turnover:] [Substituted by Act No.4 of 2009.][Provided that tax at the rate mentioned in the Schedules against those goods shall be paid, where the eating establishments mentioned above, sell packaged items with Maximum Retail Price across the counter:Provided further that no tax is payable by the hostels whether attached to educational institutions or run by charitable organizations, where such institutions and organizations charge less than Rs.1000/- (Rupees one thousand only) per student per month towards mess charges.] [Added by Act No.5 of 2007.]

(10)

[ (a) Notwithstanding anything contained in the Act or any other law for the time being in force, every person who, for an agreed commission brokerage, buys or sells on behalf of any principal who is a resident of the State shall be liable to tax under this Act at the rate or rates leviable thereunder in respect of such purchase or sale, notwithstanding that such principal is not a dealer or that the turnover of purchase or sale relating to such principal is less than the minimum specified in sub-sections (2), (3) and (4) of section 17:[Provided that the agent selling agricultural produce on behalf of the agriculturist principal, shall be exempted from payment of tax subject to such conditions as may be prescribed;] [Added by Act No.28 of 2008.]

(b)

The principal shall not be liable to tax on his turnover in respect of which the agent is liable to tax under clause (a) and the burden of proving that the turnover has been subjected to tax at the hands of his agent under the said clause shall be on such principal.]

(11)

[ Every dealer, who is engaged in the integrated activity of printing and supplying the printed materials may, in lieu of the amount of tax payable under the Act, opt to pay by way of composition an amount of tax [at the rate of five percent (5%)] [Added by Act No.21 of 2011.] on sixty percent (60%) of the total value of such supplies received or receivable, irrespective of the fact whether such supplies involve sale or works contract or job work subject to such conditions as may be prescribed.]

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