6. Liability to tax on inter-State sales
1[(1) Subject to other provisions contained in this Act, every
dealer shall, with effect from such 2
[date] as the Central
government may, by notification in the Official Gazette,
appoint, not being earlier than thirty days from the date of
such notification, be liable to pay tax under this act on all
sales 3
[of goods other than electrical energy] effected by him
in the course of inter-state trade or commerce during any year
on and from the date so notified.
1. Sec 6 re-numbered as sub-section(1) thereof by Act 31 of
1956,w.e.f. 1.10.1958.
2. Vide Notification No. SRO 940-A, dt. 26.3.1957, Gazette of
India, Extraordinary 1957 / 1.7.1957.
3. Inserted by Act 61 of 1972, w.e.f. 1.4.1973.
4
[Provided that a dealer shall not be liable to pay tax under
this Act on any sale of goods which, in accordance with the
provisions of sub-section 3 of section 5 is a sale in the course
of export of those goods out of the territory of India.] 4. Inserted by Act 103 of 1976, w.e.f. 1.4.1976
5
[1 A] A dealer shall be liable to pay tax under this Act on a
sale of any goods effected by him in the course of inter-state
trade or commerce not withstanding that no tax would have
been leviable (whether on the seller or the purchaser) under
the sales tax law of the appropriate State if that sale had
taken place inside the State.]
5. Inserted by Act 28 of 1969, retrospectively. 6
[2] Not withstanding anything contained in sub-section(1)
or sub-section (1A), where a sale of any goods in the course
of inter-State trade or commerce has either occasioned the
movement of such goods from one State to another or has
been effected by a transfer of documents of title to such
goods during their movement from one State to another, any
subsequent sale during such movement effected by a
transfer of documents of title to such goods- 6. Substituted by Act 61 of 1972, w.e.f. 1.4.1973.
(A) to the Government, or
(B) to a registered dealer other than the
government , if the goods are of the
description referred to in sub-section (3) of
Section 8, shall be exempt from tax under
this Act;
Provided that no such subsequent sale shall be exempt from tax under the
sub-section unless the dealer effecting the sale furnishes to the prescribed
authority in the prescribed manner and within the prescribed time or
within such further time as that authority may, for sufficient cause,
permit,-
(a) a certificate duly filled and signed by the registered
dealer from whom the goods were purchased containing
the prescribed particulars in a prescribed form obtained
from the prescribed authority; and
(b) If the subsequent sale is made
(i) to a registered dealer, a declaration
referred to in clause (a) of subsection(4) of section 8, or
(ii) to the Government, not being a
registered dealer, a certificate referred to
in clause (b) of sub-section(4) of Section
8 ;
Provided Further that it shall not be necessary to furnish the declaration or
the certificate referred to in clause (b) of the preceding proviso in respect
of a subsequent sale of goods ,if, -
(a) the sale or purchase of such goods is, under the sales tax law
of the appropriate State, exempt from tax generally or is
subject to tax generally at a rate which is lower than four
percent. (Whether called a tax or fee or by any other name);
and
(b) the dealer effecting such subsequent sale proves to the
satisfaction of the authority referred to in the preceding
proviso that such sale is of the nature referred to in clause (a)
or clause (b) of this sub-section.]
1[(3) Not withstanding anything contained in this Act, if – 1.Inserted by Act No. 32/2003 or 14.5.2003
(a) any official or personnel of -
(i) any foreign diplomatic mission or consulate in
India ; or
(ii) the United nations or any other similar
international body,
entitled to privileges under any convention to which India is a party or
under any law for the time being in force ; or
(b) any consular or diplomatic agent of any mission, the United
Nations or other body referred to in sub –clause (i) or subclause (ii) of clause (a).
Purchases any goods for himself or for the purposes of such
mission, United nations or other body, then, the Central
Government may, be notification in the Official Gazette,
exempt, subject to such conditions as may be specified in
the notification, the tax payable on the sale of such goods
under this Act.]
2[6A. Burden of proof, etc., in case of transfer of goods claimed otherwise
than by way of sale
2.inserted by Act 61 / 1972 w.e.f. 1.7.1973
(1) where any dealer claims that he is not liable to pay tax under
this Act, in respect of any goods, on the ground that the
movement of such goods from one State to another was
occasioned by reason of transfer of such goods by him to any
other place of his business or to his agent or principal, as the
case may be, and not by reason of sale, the burden of proving
that the movement of those goods was so occasioned shall be
on that dealer and for this purpose he may furnish to the
assessing authority, within the prescribed time or within such
further time as that authority may, for sufficient cause,
permit, a declaration, duly filled and signed by the principal
officer of the other place of business, or his agent or principal,
as the case may be, containing the prescribed particulars in
the prescribed form obtained from the prescribed authority,
along with the evidence of despatch of such goods 1
[and if the
dealer fails to furnish such declaration, then, the movement of
such goods shall be deemed for all purposes of this Act to
have been occasioned as a result of sale.] 1. Inserted by Act No. 20 / 2002 w.e.f. 11.5.2002
(2) If the assessing authority is satisfied after making such inquiry
as he may deem necessary that the particulars contained in
the declaration furnished by a dealer under sub-section(1) are
true, he may, at the time of, or at any time before, the
assessment of the tax payable by the dealer under this Act,
make an order to that effect and thereupon the movement of
goods to which the declaration relates shall be deemed for the
purpose of this Act to have been occasioned otherwise than as
a result of sale.
Explanation: In this section “assessing authority”, in relation to a dealer,
means the authority for the time being competent to assess the tax
payable by the dealer under this Act.]
7. Registration of dealers
(1) Every dealer liable to pay tax under this Act shall, within
such time as may be prescribed for the purpose, make an
application for registration under this Act to such authority in
the appropriate State as the Central Government may, by
general or special order, specify, and every such application
shall contain such particulars as may be prescribed.
2[(2) Any dealer liable to pay tax under the sales tax law of the
appropriate State, or where there is no such law in force in the
appropriate State or any part thereof, any dealer having a
place of business in that State or part, as the case may be,
may, notwithstanding that he is not liable to pay tax under
this Act, apply for registration under this Act to the authority
referred to in sub-section(1), and every such application shall
contain such particulars as may be prescribed.
2. Substituted by Act 31 of 1958.
Explanation:- For the purposes of this sub-section, a dealer shall be
deemed to be liable to pay tax under the sales tax law of the appropriate
State notwithstanding that under such law a sale or purchase made by
him is exempt from tax or refund or rebate of tax is admissible in respect
thereof].
3[2A] Where it appears necessary to the authority to whom an
application is made under sub-section (1) or sub-section(2) so
to do for the proper realization of the tax payable under this
Act or for the proper custody and use of the forms referred to
in clause (a) of the first proviso to sub-section(2) of Section 6
or sub-section (1) of Section 6A or clause (a) of subsection(4) of Section 8, he may, by an order in writing and for
reasons to be recorded therein, impose as a condition for the
issue of the Certificate of Registration a requirement that the
dealer shall furnish in the prescribed manner and within such
time as may be specified in the order such security as may be
so specified, for all or any of the aforesaid purposes;
(3) if the authority to whom an application under sub-section (1)
or sub-section(2) is made is satisfied that the application is in
conformity with the provisions of this Act and the rules made
there under and the condition, if any, imposed under subsection (2A), has been complied with, he shall register the
applicant and grant to him a Certificate of registration in the
prescribed form which shall specify the class or classes of
goods for the purposes of sub-section (1) of section 8.
1[[3A] Where it appears necessary to the authority granting
a Certificate of registration under this section so to do for the
proper realization of tax payable under this Act or for the
proper custody and use of the forms referred to in sub-section
(2A), he may, at any time while such certificate is in force, by
an order in writing and for reasons to be recorded therein,
require the dealer, to whom the certificate has been granted,
to furnish within such time as may be specified in the order
and in the prescribed manner such security, or, if the dealer
has already furnished any security in pursuance of an order
under this sub-section (2A) , such additional security, as may
be specified in the order, for all or any of the aforesaid
purposes].
1
[3 B] No dealer shall be required to furnish any security
under Sub-section(2A) or any security or additional security
under sub-section(3A) unless he has been given an
opportunity of being heard.]
1. Inserted by Act 61 of 1972.
2
[3BB] The amount of security which a dealer may be
required to furnish under sub-section (2A) or sub-section (3A)
or the aggregate of the amount of such security and the
amount of additional security which he may be required to
furnish under sub-section (3A), by the authority referred to
therein, shall not exceed-
2. Substituted by Act 103 of 1976
(a) In the case of a dealer other than a dealer who has
made an application, or who has been registered in
pursuance of an application, under sub-section(2), a
sum equal to the tax payable under this Act, in
accordance with the estimate of such authority, on
the turnover of such dealer for the year in which such
security or, as the case may be, additional security is
required to be furnished; and
(b) In the case of a dealer who has made an
application, or who has been registered in pursuance
of an application, under sub-section(2), a sum equal
to the tax leviable under this Act, in accordance with
the estimate of such authority on the sales to such
dealer in the course of inter-State trade of commerce
in the year in which such security or, as the case may
be additional security is required to be furnished, had
such dealer been not registered under this Act.]
[3C] Where the security furnished by a dealer under sub-section
(2A) or sub-section (3A) is in the form of a surety bond and
the surety becomes insolvent or dies, the dealer shall, within
thirty days of the occurrence of any of the aforesaid events,
inform the authority granting the certificate of registration and
shall within ninety days of such occurrence furnish a fresh
surety bond or furnish in the prescribed manner other security
for the amount of the bond.
[3 D] The authority granting the certificate of registration may by
order and for good and sufficient cause forfeit the whole or
any part of the security furnished by a dealer,-
(a) for realizing any amount of tax or penalty
payable by the dealer;
(b) if the dealer is found to have misused any of
the form referred to in sub-section (2A) or to
have failed to keep them in proper custody.
PROVIDED that no order shall be passed under this
sub-section without giving the dealer an opportunity
of being heard.
[3E] where by reason of an order under sub-section [3D], the
security furnished by any dealer is rendered insufficient, he
shall make up the deficiency in such manner and within such
time as may be prescribed.
[3 F] The authority issuing the forms referred to in sub-section(2A)
may refuse to issue such forms to a dealer who has failed to
comply with an order under that sub-section or sub-section
(3A), or with the provisions of sub-section (3C) or sub-section
(3E), until the dealer has complied with such order or such
provisions, as the case may be.
[3 G] The authority granting a Certificate of registration may, on
application by the dealer to whom it has been granted, order
the refund of any amount or part thereof deposited by the
dealer by way of security under this section, if it is not
required for the purposes of this Act.
[3H] Any person aggrieved by an order passed under sub-section
[2A], sub-section [3A], sub-section [3D] or sub-section [3G]
may, within thirty days of the service of the order on him, but
after furnishing the security, prefer, in such form and manner
as may be prescribed, an appeal against such order to such
authority (hereafter in this section referred to as the
“appellate authority”) as may be prescribed:
Provided that the appellate authority may, for sufficient cause, permit
such person to present the appeal,-
(a) after the expiry of the said period of thirty days; or
(b) without furnishing the whole or any part of such
security
[3 I] The procedure to be followed in hearing any appeal under
sub-section (3H), and the fees payable in respect of such
appeals shall be such as may be prescribed.
[3J] The order passed by the appellate authority in any appeal
under sub-section(3H) shall be final.]
1[[4] A certificate of registration granted under this section may –
1. Substituted by Act of 1972 forwards” or has
ceased to exist w.e.f. 1.4.1973
(a) either on the application of the dealer to whom it has
been granted or, where no such application has been
made, after due notice to the dealer, be amended by
the authority granting it if he is satisfied that by
reason of the registered dealer having changed the
name, place or nature of his business or the class or
classes of goods in which he carries on business or
for any other reason the certificate of registration
granted to him requires to be amended ; or
(b) be cancelled by the authority granting it where he is
satisfied, after due notice to the dealer to whom it
has been granted, that the has ceased to carry on
business 1
[or has ceased to exist or has failed without
sufficient cause, to comply with an order under subsection [3A] or with the provisions of sub-section
[3C] or sub-section [3E] or has failed to pay any
tax or penalty payable under this Act], or in the case
of a dealer registered under sub-section(2) has
ceased to be liable to pay tax under the sales tax law
of the appropriate State or for any other sufficient
reason.]
[5] A registered dealer may apply in the prescribed manner not
later than six months before the end of a year to the authority
which granted his certificate of registration for the cancellation
of such registration, and the authority shall, unless the dealer
is liable to pay tax under this Act, cancel the registration
accordingly, and where he does so, the cancellation shall take
effect from the end of the year.
8. Rates of tax on Sales in the course of inter-state trade or
commerce
2[[1] Every dealer, who in the course of inter-State trade of
commerce,-
2.Substituted by Act 31 of 1958 w.e.f. 1.10.1958
(a) Sells to the government any goods; or
(b) Sells to a registered dealer other than the
Government goods of the description to in
sub-section(3);
1[2] [shall be liable to pay tax under this Act, with effect from such
date as may be notified by the Central Government in the
Official Gazette for this purpose, which shall be two per cent,
of his turnover or at the rate applicable to the sale or purchase
of such goods inside the appropriate state under the Sales tax
law of that State, or, as the case may be, under any
enactment of that state imposing value added tax, whichever
is lower.
1 Substituted for certain words vide Act No. 32 of 2003, dated
14.5.03
Provided that the rate of tax payable under this sub-section by a dealer
shall continue to be four cent of his turnover, until the rate of two per
cent, takes effect under this sub-section.]
(2) The tax payable by any dealer on his turnover insofar as
the turnover or any part thereof relates to the sale of
goods in the course of inter-State trade or commerce
not falling within sub-section (1) –
(a) In the case of declared goods, shall be calculated 2
[at
twice the rate] applicable to the sale or purchase of such
goods inside the appropriate State; 3
[and]
2.Substituted by Act 25 of 1975 for words “at the rate” w.e.f. 1.7.1975
3 Word “and” omitted by Act No. 20 of 2002, w.e.f. 11.5.02
(b) In the case of goods other than declared goods, shall be
calculated at the rate of ten per cent or at the rate
applicable to the sale or purchase of such goods inside
the appropriate State, which ever is higher 2
[;and]
4
[c] In the case of goods, the sale or, as the case may be,
the purchase of which is, under the sales tax law of the
appropriate state, exempt from tax generally shall be
nil.
and for the purpose of making any such calculation
under clause (a) or clause (b), any such dealer shall be
deemed to be a dealer liable to pay tax under the sales
tax law of the appropriate state, not withstanding that
he, in fact, may not be so liable under that law..
4. substituted by Act No.20 of 2002, for “and for the purpose of makinganysuch
calculation any such dealer shall be deemed to be a dealer liable to pay tax
under the sales tax of the appropriate State ,notwithstanding that he, in fact,
may not be so liable under that law”.
Explanation: For the purposes of this sub-section a sale or purchase of
any goods shall not be deemed to be exempt from tax generally under the
sales tax law of the appropriate State if under that law the sale or
purchase of such goods is exempt only in specified circumstances or under
specified conditions or the tax is levied on the sale or purchase of such
goods at specified stages or otherwise than with reference to the turnover
of the goods.]
5
[[2A]***]
5. Omitted by Act No.20 of 2002, w.e.f. 11.5.2002
[3] The goods referred to in clause (b) of sub-section(1) –
6
[***]
6. Clause (a) Omitted by Act 8 of 1963, w.e.f. 1.4.1963
[b] 7
[* * * ] are goods of the class or classes specified in the
certificate of registration of the registered dealer purchasing
the goods as being intended for re-sale by him or subject to
any rules made by the Central Government in this behalf, for
use by him in the manufacture or processing of goods for sale
or 8
[in the telecommunication network or]
7. Certain words omitted by Act 8 of 1963 w.e.f 1.4.1963
8. Inserted by Act No. 20 / 2002 w.e.f. 11.5.2002
in mining or in generation or distribution of electricity or any
other form of power;
(c) are containers or other materials specified in the
certificate of registration of the registered dealer
purchasing the goods, being containers or materials
intended for being used for the packing of goods for
sale;
(d) are containers or other materials used for the packing of
any goods or classes of goods specified in the certificate
of registration referred to in 1
[***] clause (b) or for the
packing of any containers or other materials specified in
the certificate of registration referred to in clause (c).
1. Words, brackets and letter “clause[a] or” omitted by Act 8 / 83 w.e.f.
1.4.1962
(4) The provisions of sub-section (1) shall not apply to any sale in course
of inter-state trade or commerce unless the dealer selling the goods
furnishes to the prescribed authority in the prescribed manner.-
(a) a declaration duly filled and signed by the registered
dealer to whom the goods are sold containing the
prescribed particulars in a prescribed form obtained
from the prescribed authority ; or
(b) if the goods are sold to the Government, not being
a registered dealer, a certificate in the prescribed form
duly filled and signed by a duly authorized officer of the
Government:]
2[Provided that the declaration referred to in clause [a] is furnished within
the prescribed time or within such further time as that authority may, for
sufficient cause, permit.]
2. Inserted by Act 6 / 1972 w.e.f. 1.4.1973
3[[5] Notwithstanding anything contained in this section, the State
Government may, 4
[on the fulfillment of the requirements laid down in
sub-section(4) by the dealer.] if it is satisfied that it is necessary so to do
in the public interest, by notification in the Official Gazette, and subject to
such conditions as may be specified therein, direct,-
3. Substituted by Act 61 / 1972 w.e.f. 1.4.1973
(a) that no tax under this Act shall be payable by any
dealer having his place of business in the State in
respect of the sales by him, in the course of inter-State
trade or commerce, 4
[to a registered dealer or the
Government] from any such place of business of any
such goods or classes of goods as may be specified in
the notification, or that the tax on such sales shall be
calculated at such lower rates than those specified in
sub-section(1) or sub-section(2) as may be mentioned
in the notification;
(b) that in respect of all sales of goods or sales of such
classes of goods as may be specified in the notification,
which are made, in the course of inter-state trade or
commerce, 4
[to a registered dealer or the Government]
by any dealer having his place of business in the State
or by any class of such dealers as may be specified in
the notification to any person or to such class of persons
as may be specified in the notification, no tax under this
Act shall be payable or the tax on such sales shall be
calculated at such lower rates than those specified in
sub-section(1) or sub-section (2) as may be mentioned
in the notification.]
4. Inserted by Act 20 of 2002
1[[6] Notwithstanding anything contained in this section, no
tax under this Act shall be payable by any dealer in
respect of sale of any goods made by such dealer, in
the course of inter-state trade or commerce to a
registered dealer for the purpose of setting up,
operation, maintenance, manufacture, trading,
production, processing, assembling, repairing,
reconditioning, re-engineering, packaging or for use as
packing material or packing accessories in a unit located
in any special economic zone, or for development,
operation and maintenance of Special Economic Zone,
by the developer of the Special economic zone, if such
registered dealer has been authorized to establish such
unit or to develop operate and maintain such special
economic zone by the authority specified by the Central
Government in this behalf.]
1. sub section [6] was amended fully vide the Finance [No.2] Act 2004
[No. 23/2004] dt. 10.9.04
[7] The goods referred to in sub-section[6] shall be the
goods of such class or classes of goods as specified in
the certificate of registration of the registered dealer
referred to in that sub-section.
2[8] The provisions of sub-section [6] and [7] shall not apply
to any sale of goods made in the course of inter-state
trade of commerce unless the dealer selling such goods
furnishes to the 2
“prescribed authority referred to in
sub-section [4] a declaration in the prescribed manner
on the prescribed form obtained from the authority
specified by the Central Government under sub-section
[6]”, duly filled in and signed by the registered dealer to
whom such goods are sold.
2. sub section [8] was amended vide The Finance [No.2] Act 2004 [No.
23/2004]dt. 10.9.04
Explanation : For the purposes of sub-section[6], the expression “special
economic zone’ has the meaning assigned to it in clause [iii] to
Explanation 2 to the proviso to section 3 of the Central Excise
Act, 1944 [1 of 1944].]
3
[8A] Determination of turnover. 3. Inserted by Act. 28 of 1969 retrospectively.
(1) In determining the turnover of a dealer for the purpose
of this Act, the following deductions shall be made from
the aggregate of the sale prices, namely;
(a) the amount arrived at by applying the following formula
–
rate of tax X aggregate of sale prices
______________________________
100 + rate of tax
Provided that no deduction on the basis of the above formula shall be
made if the amount by way of tax collected by a registered dealer, in
accordance with the provisions of this Act, has been other wise deducted
from the aggregate of sales prices.
Explanation: where the turnover of a dealer is taxable is taxable at
different rates, the aforesaid formula shall be applied separately in respect
of each part of a turnover liable to a different rates of rates;
(b) the sale price of all goods returned to the dealer by the
purchases of such goods-
(i) within a period of three months from the date
delivery of the goods, in the case of goods
returned before the 14th day of May, 1966.
(ii) Within a period of six months from the date of
delivery of the goods, in the case of goods
returned on or after the 14th day of May,1966.
Provided that satisfactory evidence of such return of goods and of refund
or adjustment in accounts of the sale price thereof is produced before the
authority competent to assess or as the case may be, reassess the tax
payable by the dealer under this Act; and
(c) such other deducting as the Central Government may,
having regard to the prevalent market conditions, facility
of trade and interests of consumers, prescribe.
(2) save as otherwise provided in sub-section(1), in
determining the turnover of a dealer for the purposes of this
Act, no deduction shall be made from the aggregate of the
sale prices.]
1[9. Levy and collection of tax and penalties
1. Substituted by Act 28 / 1969 for s9 retrospectively.
(1) The tax payable by any dealer under this Act on sales of
goods effected by him in the course of inter-state trade or
commerce, whether such sales fall within clause [a] or
clause[b] of section 3, shall be levied by the Government of
India and the tax so levied shall be collected by that
Government in accordance with the provisions of subsection[2] , in the State from which the movement of the
goods commenced.
2
Provided that, in the case of a sale of goods during their
movement from one State to another, being a sale
subsequent to the first sale in respect of the same goods
and being also a sale which does not fall within sub-section
[2] of section 6, the tax shall be levied and collected 2. Substituted by Act 103 / 1976 for the proviso
(a) where such subsequent sale has been effected by a
registered dealer in the State from which the
registered dealer obtained or, as the case may be,
could have obtained, the form prescribed for the
purposes of clause[a] of sub- section [4] of section
8 in connection with the purchase of such goods,
and
(b) where such subsequent sale has been effected by
an unregistered dealer in the State from which such
subsequent sale has been effected.]
[2] Subject to the other provisions of this Act and the rules made
there under, the authorities for the time being empowered
to assess, reassess, collect and enforce payment of any tax
under the General Sales Tax law of the appropriate State,
shall on behalf of the Government of India, assess,
reassess, collect and enforce payment of tax, including any
3
[interest or penalty], payable by a dealer under this Act as
if the tax or 3
[interest or penalty]
3.substituted for “Penalty” by finance Act 2000. w.e.f. 12.5.2000
payable by such a dealer under this Act is a tax or
[Interest or penalty] payable under the General Sales Tax
law of the State and for this purpose they may exercise all
or any of the powers they have under the General Sales
Tax law of the State; and the provisions of such law,
including provisions relating to returns, provisional
assessment, advance payment of tax, registration of the
transferee of any business, imposition of the tax liability of
a person carrying on business on the transferee of, or
successor to, such business, transfer of liability of any firm
or Hindu undivided family to pay tax in the event of the
dissolution of such firm or partition of such family, recovery
of tax from third parties, appeals, reviews, revisions,
references, 1
[refunds, rebates, penalties] 2
[charging or
payment or interest,] compounding of offences and
treatment of documents furnished by a dealer as
confidential, shall apply accordingly.
1.Substituted by Act 61 of 1971 forwards “refunds penalties” w.e.f. 1973.
2.Inserted by Act 103 of 1976 retrospectively
Provided that if any State or part thereof there is no
general sales tax law in force, the Central Government
may, by rules made in this behalf make necessary
provisions for all or any of the matters specified in this subsection.
2[[2A] All the 3
[provisions relating to offences, interest and
penalties] [including provisions relating to penalties in lieu
of prosecution for an offence or in additions to the penalties
or punishment for an offence but excluding the provisions
relating to matters provided for in sections 10 and 10A] of
General sales Tax law of each state shall, with necessary
modifications, apply in relation to the assessment,
reassessment, collection and the enforcement of payment
of any tax required to be collected under this Act in such
State or in relation to any process connected with such
assessment, reassessment, collection or enforcement of
payment as if the tax under this Act were a tax under such
sales tax law.]
2.Inserted by Act 103 of 1976 retrospectively. 3. Substituted for “provisions relating to offences and penalties” by
finance Act 2000 w.e.f. 12.5.2000
4[[2B] If the tax payable by any dealer under this Act is not paid
in time, the dealer shall be liable to pay interest for delayed
payment of such tax and all the provisions relating to due
date for payment of tax, rate of interest for delayed
payment of tax and assessment and collection of interest
for delayed payment of tax, of the General Sales Tax law
of each State, shall apply in relation to due date for
payment of tax, rate of interest for delayed payment of tax,
and assessment and collection of interest for delayed
payment of tax under this Act in such States as if the tax
and the interest payable under this Act were a tax and an
interest under such sales tax law.] 4. Inserted by Finance Act 2000 w.e.f. 12.5.2000
[3] The proceeds in any financial year of any tax, 5
[including
any interest or penalty], levied and collected under this Act
in any State (other than a Union Territory) on behalf of the
Government of India shall be assigned to that State and
shall be retained by it; and the proceeds attributable to
Union Territories shall form part of the Consolidated Fund
of India.] 5. Substituted for “including any penalty” by finance Act 2000 w.e,f,
12.5.2000.
9A. Collection of tax to be only by registered dealers
No person who is not a registered dealer shall collect in
respect of any sale by him of goods in the course of interstate trade or commerce any amount by way of tax under
this Act, and no registered dealer shall make any such
collection except in accordance with this Act and the rules
made there under.
19B. Rounding off of tax, etc.
1. Inserted by Act 61/1972 w.e.f. 1.4.1973
The amount of tax, interest, penalty, fine or any other sum
payable, and the amount of refund due, under the
provisions of this Act shall be rounded off to the nearest
rupee and, for this purpose, where such amount contains a
part of rupee consisting of paise, then, if such part is fifty
paise or more it shall be increased to one rupee and if such
part is less than fifty paise, it shall be ignored.
Provided that nothing in this section shall apply for the
purpose of collection by a dealer of any amount by way of
tax under this Act in respect of any sale by him of goods in
the course of inter-state trade or commerce.]
10. Penalties
If any person,-
2[[a] furnishes a certificate or declaration under sub-section (2)
of section 6 or sub-section [1] of section 6A or sub-section
[4] 3
[or sub-section[8] of section 8, which he knows, or has
reason to believe, to be false; or
2. Substituted by Act 61/1972 for cl[a] w.e.f. 1.4.1973
3. Inserted by Act No. 20/2002 w.e.f. 11.5.2002
(aa) fails to get himself registered as required by section 7,
or fails to comply with an order under sub-section[3A] or
with the requirements of sub-section[3c] or sub-section
[3E], of that section; or]
(b) being a registered dealer, falsely represents when
purchasing any class of goods that goods of such class
are covered by his certificate of registration; or
(c) not being a registered dealer, falsely represents when
purchasing goods in the course of inter-state trade or
commerce that he is a registered dealer; or
(d) after purchasing any goods for any of the purposes
specified in 4
[clause [b] or clause [c] or clause [d] of
sub-section [3] 5
[or sub-section [6] of section 8 fails,
without reasonable excuse, to make use of the goods
for any such purpose; 4.substituted by Act 61/12 for “clause [&]” w.e.f. 1.4.1973
5. Inserted by Act No. 20/2002 w.e.f. 11.5.2002
(e) has in his possession any form prescribed for the
purpose of sub-section[4] [or sub-section[8] of section
8 which has not been obtained by him or by his
principal or by his agent in accordance with the
provisions of this Act or any rules made there under;
or
6
[[f] collects any account by way of tax in contravention
of the provisions contained in section 9a].
6. Inserted by Act 31/1958 w.e.f. IX 1958
he shall be punishable with simple imprisonment
which may extend to six months or with fine or with
both; and when the offence is continuing offence, with
a daily fine which may extend to fifty rupees for every
day during which the offence continues.
110 A. Imposition of penalty in lieu of prosecution. 1. Inserted by Act 31 1958 w.e.f. ix 1958.
2[[1] If any person purchasing goods is guilty of an offence
under clause [b] or clause [c] or clause [d] of section
10, the authority who granted to him or, as the case
may be, is competent to grant to him a certificate of
registration under this Act may, after giving him a
reasonable opportunity of being heard, by order in
writing, impose upon him by way of penalty a sum not
exceeding one-and-a half times 3
[the tax which would
have been levied under sub-section[2] of section 8 in
respect of the sale to him of the goods, if the sale had
been a sale falling within that sub-section]:
2. Sec 10A renumbered as sub section(1) of that section
by Act 28/1969 w.e.f. 1.10.1958
3. Substituted by Act 61/1972 for certain words w.e.f.
1.4.1978
Provided that no prosecution for an offence under
section 10 shall be instituted in respect of the same
facts on which a penalty has been imposed under this
section.
4
[[2] The penalty imposed upon any dealer under subsection[1] shall be collected by the Government of
India in the manner provided in sub-section[2] of
section9,- 4. Inserted by Act 28/1969 w.w.f. 1.10.1958.
(a) in the case of an offence falling under
clause [b] or clause [d] of section 10, in the
State in which the person purchasing the goods
obtained the form prescribed for the purposes of
clause [a] of sub-section [4] of section 8 in
connection with the purchase of such goods;
(b) in the case of an offence falling under
clause [c] of section 10, in the state in which the
person purchasing the goods should have
registered himself if the offense had not be
committed;]
11. Cognizance of offences
(1) No court shall take cognizance of any offence
punishable under this Act or the rules made there under
except with the previous sanction of the Government
within the local limits of whose jurisdiction the offence has
been committed or of such officer of that Government as
it may, by general or special order, specify in this behalf;
and no court inferior to that of a Presidency Magistrate or
a Magistrate of the First Class shall try any such offence.
(2) All offences punishable under this Act shall be
cognizable and bail able
12. Indemnity
No suit prosecution or other legal proceeding shall lie
against any officer of Government for anything which is in
good faith done or intended to be done under this Act or
the rules made there under.
13. POWER TO MAKE RULES
(1) The Central Government may, by notification in the
Official Gazette, make rules providing for –
(a) the manner in which application for registration
may be made under this Act, the particulars to
be contained therein, the procedure for the
grant of such registration, the circumstances in
which registration may by refused and the form
in which the certificate of registration may be
given:
1
[[aa] the form and the manner for furnishing
declaration under sub-section [8] of section 8
(b) the period of turnover, the manner in which the
turnover in relation to the sale of any goods
under this Act shall be determined, and the
deductions which may be made 2
[under clause
[c] of sub-section [1] of section 8A] in the
process of such determination.
(c) the cases and circumstances in which, and the
conditions subject to which, any registration
granted under this Act may be cancelled.
3
[[d] the form in which and the particulars to be
contained in any declaration or certificate
to be given under this Act 2
[ the state of origin
of such form or certificate and the time within
which any such certificate or declaration shall
be produced or furnished];
(e) the enumeration of goods or class of goods
used in the manufacture or processing of
goods for sale or in mining or in the
generation or distribution of electricity or any
other form of power;
(f) the matters in respect of which provision may
be made under the proviso to 4
[sub-section[2]
of section 9.
(g) The fees payable in respect of application
under this Act;]
5
[h] the proper functioning of the authority
constituted under section 19:
(i) the salaries and allowances payable to, and
the terms and conditions of service of, the
chairman and Members under sub-section (3)
of section 19;
(j) any other matter as may be prescribed.]
1. Inserted by Act No. 20/2002 w.e.f. 11.5.02
2. Inserted by Act No. 61/1972 w.e.f. 1.41973
3. Substituted by Act 31/1958 for (d) w.e.f. ix 1958
4. substituted by Act 28/1969 for “sub-section [3] “
retrospectively
5. Inserted by CST (Amendemnet) Act 41/2001 dt
11.9.2001
6[2] Every rule made by the Central Government under
sub-section [1] shall be laid, as soon as may be
after it is made, before each House of Parliament,
while it is in session, for a total period of thirty days
which may be comprised in one session or in two or
more successive session , and if, before the expiry
of the session immediately following the season or
the successive sessions aforesaid, both Houses
agree in making any modification in the rule or both
Houses agree that the rule should not be made, the
rule shall there after have effect only in such
modified form or be of no effect, as the case may
be; so, however, that any such modification or
annulment shall be without prejudice to the validity
of anything previously done under that rule.] 6. substituted by Act 61/1972 for sub-section [2] w.e.f. 1.4.1973
[3] The State Government may make rule, not inconsistent
with the provisions of this Act and the rules made
under sub-section[1], to carry out the purposes of this
Act.
[4] In particular and without prejudice to the powers
conferred by sub-section[3], the state Government
may make rules for all or any of the following
purposes, namely:-
(a) the publication of lists of registered dealers, of
the amendments made in such lists from time to
time, and the particulars to be contained in such
lists;
1
[[aa] the manner in which security may be furnished
under sub-section[2A] or sub-section [3A] or
sub-section[3C] of section 7 and the manner in
which and the time within which any deficiency
may be made up under sub-section [3E] of that
section;]
(b) the form and manner in which accounts relating
to sales in the course of inter-state trade or
commerce shall be kept by registered dealers;
(c) the furnishing of any information relating to the
stocks of goods of purchases, sales and delivers
of goods by, any dealer or any other information
relating to his business as may be necessary for
the purposes of this Act;
(d) the inspection of any books; accounts or
documents required to be kept under this Act,
the entry into any premises in all reasonable
times for the purposes of searching for any such
books, accounts or documents kept or
suspected to be kept in such premises and the
seizure of such books, accounts or documents;
1
[(e)] the authority from whom, the conditions subject
to which and the fees subject to payment of
which any form of certificate prescribed under
clause [a] of the first proviso to sub-section[2]
of section 6 or declaration prescribed under subsection[1] of section 6A or sub-section[4] of
section 8 may be obtained, the manner in which
such forms shall be kept in custody and records
relating there to maintained and the manner in
which any such form may be used and any such
certificate or declaration may be furnished; 1. substituted by Act 61/1972 for [e] w.e.f. 1.4.1973
[ee] the form and manner in which, and the authority
to whom, an appeal may be preferred under
sub-section[3H] of section 7, the procedure to
be followed in hearing such appeals and the fees
payable in respect of such appeals;]
(f) in the case of an Undivided Hindu Family,
association, club, society, firm or company or in
the case of a person who carries on business as
a guardian or trustee or otherwise on behalf of
another person, the furnishing of a declaration
stating the name of the person who shall be
deemed to be the manager in relation to the
business of the dealer in the State and the form
in which such declaration may be given.
(g) The time within which , the manner in which and
1
[the authorities to whom] any change in the
ownership of any business or in 2
[the name,
place or nature ] of any business carried on by
any dealer shall be furnished.
1. substituted by Act 31/1958 for words “the authorities to
which” w.e.f. 1.10.1958
2. substituted by Act 31/1958 for words “the nature” w.e.f.
1.10.1958
(5) In making any rule under this section, 3
[the Central government
or, as the case may by, the State Government] may direct that a
breach thereof shall be punishable with fine which may extend to
five hundred rupees and when the offence is a continuing offence,
with a daily fine which may extend to fifty rupees for every day
during which the offence continues.
3. substituted by Act 61/1972 for words ‘the State
Government” w.e.f 1.4.1972