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Act & Rules-CST
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| Act & Rules-KGST |
| Act & Rules-CST |
| Act |
| Rules-central Rules-Kerala |
| Forms-Central Forms-Kerala |
| Act & Rules-AIT |
| Act & Rule-Entry Tax |
| Act & Rules-K.M.L. |
| Act &Rules-Luxury Tax |
THE
CENTRAL SALES TAX ACT, 1956 An act to formulate principles for determining when a sale or purchase of goods takes place in the course of inter-state trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distribution of taxes on sales of goods In the course of Interstate trade or commerce and to declare certain goods to be of special importance in inter-state trade or commerce and specify the restrictions and conditions to which State Laws imposing taxes on the sale or purchase of such goods of special importance shall be subject. Be it enacted by Parliament in the Seventh Year of the Republic of India as follows: CHAPTER 1 PRELIMINARY1 Short title, extent and commencement:- (1) This Act may be called the Central Sales Tax Act, 1956. (2) It extends to the whole of India. 1[X X X X](3) It shall come into force on such date* as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act. 2 Definitions:- In this Act, unless the context otherwise requires, (a) "appropriate State" means (i) in relation to a dealer who has one or more places of business situate in the same State, that State; (ii) in relation to a dealer who has 2[XXXX] places of business situate in different States, every such State with respect to the place or places of business situate within its territory; 3[XXXX] 4[(aa) "business” includes (i) any trade, 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 with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure or concern; and (ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; (ab) "crossing the customs frontiers of India" means crossing the limits of the area of a customs station in which imported goods or exported goods are ordinarily kept before clearance by customs authorities. Explanation:-
For the purposes of this clause, "customs station" and
customs authorities' shall have the same meanings as in the Customs
Act, 1962 (52 of 1962).] -------------------------------------------------------------------------------------------- * The Act, except section 15 came into force on 5-1-1957, vide Noti. No. S.R.O. 80. Section 15 came into force on 1-9-1958 Vide Noti. No. G.S.R. 897 dt 23-9-1958 2. The words "one or more" omitted by Act 310f 1958, w.e.f. 1-10-1958. 3. Explanation omitted by Act 31 of 1958, w.e.f. 1-10-1958 5[(b) "dealer" means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly for cash, or for deferred payment, or for commissions, remuneration or other valuable consideration, and includes (i) a local authority, a body corporate, a company, any co-operative society or other society, club, firm., Hindu undivided family or other association of persons which carries on such business; (ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by whatever name called, and whether of the same description as herein before mentioned or not, who carries on the business of buying, selling, supplying or distributing, goods belonging to any principal whether disclosed or not; and (iii) an auctioneer who carries on the business of selling or auctioning goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal. Explanation 1:- Every person who acts as an agent, in any State, of a dealer residing outside that State and buys, sells, supplies, 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, (3 of 1930) or (ii) an agent for handling of 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 or officer in a state or a firm registered outside that State or a Company or other body corporate, the principal office or headquarters whether of is outside that State, shall be deemed to be a dealer for the purposes of this Act. Explanation 2:- A 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 consideration, shall except in relation to any sale, supply or distribution of surplus, unserviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act;] (c) "declared goods" means goods declared under Section 14 to be of special importance in inter-state trade or commerce; (d) "goods" includes all materials, articles, commodities and all other kinds of movable property,but does not include 6[newspaper] actionable claims, stocks, shares and securities; 7[(dd) "place of business" includes (i) in any case where a dealer carries on business through an agent (by whatever name called), the place of business of such agent; (ii) a warehouse, godown or other place where a dealer stores his goods; and (iii) a place where a dealer keeps his books of account;] (e) "prescribed' means prescribed by rules made under this Act; (f) "registered dealer” means a dealer who is registered under Section 7; 7A[(g) "sale" with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or deferred payment or for any other valuable consideration, and includes.- (i) a transfer, otherwise than in pursuance of contract, of property in any goods for cash, deferred payment or other valuable consideration; (ii) a transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract; (iii)
a delivery of goods on hire-purchase or any system of
payment by installments; 5. Substituted by Act 103 of 1976, w.-e.f. 7-9-1976. 6. Inserted by Act 31 of 1958, w.e.f. 1-10-1958. 7. Inserted by Act 31 of 1958, w.e.f. 1-10-1958. 7A. Substituted by Act 20 of 2002. ------------------------------------------------------------------------------------ (iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (v) a supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration; (vi) a supply, by way of or part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, but does not include a mortgage or hypothecation of or a charge or pledge on goods;] (h) "Sale price" means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged; or part thereof which provides the levy of tax on the sale or purchase of goods generally; (i) "sales tax law” means any law for the time being in force in any State or part thereof which provides for the levy of taxes .on the sale or purchase of goods generally or of any specified goods expressly mentioned in that behalf, and "general sales tax law" means the law for the time being in force in any State or part thereof which provides for the levy on the sale or purchase ot goods generally; j) "turnover" used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of interstate trade or commerce made during any prescribed period 8[and determined in accordance with the provisions of this Act and the rules made thereunder.] . . (k) "year" in relation to a dealer, means the year applicable in relation to him. under the general sales tax law of the appropriate State, and where there is no such year applicable, the financial year. CHAPTER IIFORMULATION OF PRINCIPLES FOR DETERMINING WHEN A SALE OR PURCHASE OF GOODS TAKES PLACE IN THE COURSE OF INTER-STATE TRADE OR COMMERCE OR OUTSIDE A STATE OR IN THE COURSE OF IMPORT OR EXPORT 3. When is a sale or purchase of goods said to take place in the course of inter-state trade or commerce.- A sale or purchase of goods shall be deemed to take place in the course of inter-state trade or commerce if the sale or purchase. (a) occasions the movement of goods from one State to another or, agenda (b) is effected by a transfer of documents of title to the goods during their movement from one State to another. Explanation 1.- Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2.- Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State. 4. When is a sale or purchase of goods said to take place outside a State.- (1) Subject to the provisions contained in Section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. (2) A sale or purchase of goods shall be deemed to take place inside a State, if the goods are with in the State-.
(a) in the case of specific or ascertained goods, at the time
the contract of sale is made; and -------------------------------------------------------------------------------------- 8. Substituted for the words "and determined in the prescribed manner" by Act 28 of 1969. -------------------------------------------------------------------------------------- (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. Explanation 1.- Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the goods at each of such places. 5. When is a sale or purchase of goods said to take place in the course of import or export (1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India; (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. 9[(3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.] CHAPTER IIIINTER STATE SALES TAX 6. Liability to tax on Inter-State sales.- 10[(1)] Subject to the other provisions contained in this Act, every dealer shall, with effect from such 11[date as the Central Government may, be 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 of goods other than electric energy] effected by him in the course of Inter-State trade or commerce during any year on and from the date so notified: 14[(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 notwithstanding 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 that State.] 15[(2) Notwithstanding anything contained in sub-section (1) or sub-section (1-A), 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 the state to another any subsequent sale during such movement effected by a transfer of documents of title to such goods- (A) to the Government, or (B) to a registered dealer other than Government, if the goods are of the description referred to in sub-section (3) of Section 8, shall be exempted from tax under this Act: Provided
that no such subsequent sale shall be exempted from tax under
this sub-section unless the dealer effecting the sale furnished
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, ------------------------------------------------------------------------------------- 10. Original Section 6 renumbered as Sub-section (1) and Sub-section (2) inserted by Act 31 1-10-1958. 11. 1st July 1957, vide Notification No. S.R.O. 940 A, dt 26-3-1957. 12. Inserted by Act 61 of 1972, w.e.f. 1-4-1973. 13. Proviso inserted by Act 103 of 1976, w.e.f. 1-4-1976. 14. Inserted by Act 28 of 1969. 15.
Substituted by Act 61 of 1972, w.e.f. 1-4-1973. (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 sub-section (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 16[four per cent] (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 in of the nature referred to in clause (A) or clause (8) of this subsection]. 16A[(3) notwithstanding anything contained in this Act, if (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, entitle 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 sub clause (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, by notification in the Official Gazette, exempt, subject to such conditions as my be specified in the notification the tax payable on the sale of such goods under this Act]. 17[6A. Burden of proof, etc., in case of transfer of goods claimed otherwise than by way of sale:- (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] 17A[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]. (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 purposes 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] ----------------------------------------------------------------------------- 17. Inserted by Act 61 of 1972, w.e.f. 1-4-1973. 17 A. lnserted by Act 20 of 2002. 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. 18[(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. 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 a refund or rebate of tax is admissible in respect thereof.] 19[(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 realisation of the tax payable under this Act or for the proper custody and used 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 6-A or clause (a) of sub-section (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 a 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) in made, is satisfied that the application is in conformity with the provisions of this Act and the rules made thereunder, 20[and the condition, if any, imposed under sub-section (2A), has 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. 21[(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 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 or sub section (2A), such additional security, as may be specified in the order, for all or any of the aforesaid purposes.] 22[(3B) 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. (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 (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] _________________________________________________________________________________ 19. Inserted by Act 61 of 1972, w.e.f. 1-4-1973. 20, Inserted by Act 61 of 1972, w.e.f. 1-4-1973. 21. Inserted by Act 61 of 1972, w.e.f. 1-4-1973. 23[(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. (3D) 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 forms 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. (3F) 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. (3G) 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. (3-1) 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] 24[(4) A certificate of registration granted under this section may (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 he has ceased to carry on business 25[or has ceased to exist or has failed without sufficient cause, to comply with an order under sub-section (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.] _Ammendment________________________________________________________________________________ 24. Substituted by Act 31 of 1958, w.e.f. 1-10-1958. 25. Substituted for the words "or has to exist" by Act 61 of 1972, w.e.f. 1-4-1973. _________________________________________________________________________________ (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:- (a) sells to the Government any goods; or (b) sells to a registered dealer other than the Government goods of the description referred to in sub-section (3) Provided that the rate of tax payable under this sub-section by a dealer shall continue to be four percent of this turnover, until the rate of two percent takes effect under this sub-section.] 28[(2) The tax payable by any dealer on his turnover in so far 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 29[at twice the rate] applicable to the sale or purchase of such goods inside the appropriate State; 29A[X X] (b) in the case of goods other than declared goods, shall be calculated at the rate of 30[ten per cent] or at the rate applicable to the sale or purchase of such goods inside the appropriate State, 31[whichever is higher; and] 32[(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, 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 turn-over of the goods.] 31[X X X X] 34[(3) The goods referred to in clause (b) of sub-section (1) 35[(a) [xxxx] (b) 36[xxxx] are goods of the class or classes specified in the certificate of the registration of the registered dealer purchasing the goods as being intended for resale 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 Ammendments___________________________________________________________________________ 27. Substituted by Act 32 of 2003, w.e.f 14-5-2003. 28. Substituted by Act 31 of 1958, w.e.f. 1-10-1958. 29. Substituted for "at the rate" by Act 25 of 1975, w.e.f. 1-7-1975. 29A.The word "and" Omitted by Act 20 of 2002. 30. Substituted for "seven per cent" by Act 8 of 1963, w.e.f. 1-4-1963. 31. Substituted by Act 20 of 2002. 32. Substituted by Act 20 of 2002. 33. Sub-section (2A) omitted by Act 20 of 2002. 34. Substituted by Act 31 of 1958, w.e.f. 1-10-1958. 35. Clause (a) omitted by Act 8 of 1963, w.e.f. 1-4-1963. 36. The words "in the case of goods other than declared goods" omitted by Act 8 of 1963, w.e.f. 1- 4 -1963. _____________________________________________________________________________ goods for sale or 36A[in the telecommunications network or] in mining or in the 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 37[XXXX] clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause (c).] 38[(4)] The Provisions of sub-section (1) shall not apply to any sale in the 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 duly authorised officer of the Government] 40[(5) Notwithstanding anything contained in this section, the State Government may, 40A[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 public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein, direct, (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, 40A[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, 40A[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.] 40B[[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 manufacture, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as trading or packing material or packing accessories in an unit located in any special economic zone, if such registered dealer has been authorised to establish such unit by the authority specified by the Central Government in this behalf. (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. (8)
The provisions of sub-sections (6) and (7) shall not apply to
any sale of goods made in the course of inter-State trade or commerce
unless the dealer selling such goods furnishes to the authority
referred to in sub-section (6) a declaration in the prescribed
manner on the prescribed form obtained from the authority referred
to in sub-section (5), duly filled in and signed by the registered
dealer to whom such goods are sold. ---------------------------------------------------------------------------------------------------------- 37. The words "Clause (at omitted by Act 8 of 1963, w.e.f. 1-4-1963. . 38. Substituted for the main clause of Sub-section (4) by Act 31 of 1958, w.e.f. 1-10-1958. 39. Proviso inserted by Act 61 of 1972, w.e.f. 1-4-1973. 40. Substituted by Act 61 of 1972, w.e.f. 1-4-1973. 40A. Inserted by Act 20 of 2002. 40B.lnserted by Act 20 of 2002, w.e.f the date to be notified by the Government. ------------------------------------------------------------------------------------------------------------ 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).] 41[8A Determination of turnover:- (1) In determining the turnover of a dealer for the purposes of this Act, the following deduction 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 plus 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 otherwise deducted from the aggregate of sale prices. Explanation .- Where the turnover of a dealer is taxable at different rates, the aforesaid formula shall be applied separately in respect of each part of the turnover liable to a different rate of tax; (b) the sale price of all goods returned to the dealer by the purchasers of such goods (i) within a period of three months from the date of 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, re-assess the tax payable by the dealer under this Act, and (c) Such other deductions as the Central Government may, having regard to the prevalent market conditions, facility of trade and interest 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.] 42[9. Levy and collection of tax and penalties:- (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: (a) where such subsequent sale has been effected by 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 thereunder the authorities for the time being empowered to assess, re-assess, 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 *[interest or penalty], payable by a dealer under this Act as if the tax or *[interest or penalty] payable by such a dealer under this Act is a tax or *[interest or penalty] Ammendments-------------------------------------------------------------------------------------------------------------------- 42. The originally enacted Section 9 substituted by Act 31 of 1958, w.e.f. 1-10-1958. This was again substituted by Act 28 of 1969. 43. Substituted by Act 103 of 1976, w.e.f. 7-9-1976. Proceedings under Section 9 01 the Central Sales Tax Act validated by Act 103 of 1976, w.e.f. 5-1-1957. * Substituted for "penalty" by Finance Act,2000. --------------------------------------------------------------------------------------------------- Provided that if in 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 provision for all or any of the matters specified in this sub-section. 46[(2A) All the 46A[provisions relating to offences, interest and penalties] (including provisions relating to penalties in lieu of prosecutions to an offence or in addition to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in Section 10 and 10A of the 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, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law. 46B[(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 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]. (3) The proceeds in any financial year of any tax, #(including any interest or penalty] levied and collected under this Act in any State (other than 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.] 47[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 Inter-State 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 thereunder.] 48[9B. Rounding off of tax, etc.- 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 a 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 49[(a) furnishes a certificate or declaration under sub-section (2) of section p or sub-section (1) of Section 6A or sub-section (4) of Section 8, which he knows, or Ammendments------------------------------------------------------------------------------------------------- 45. Inserted by Act 103 of 1976, retrospectively 46. Sub-section (2A) inserted by Act 103 of 1976, w.e.f. Ibid. 46A Substituted for "provisions relating to offences and penalties" by Finance Act, 2000. 46b Sub-section (26) inserted by Finance Act, 2000. # Substituted for "including any penalty" by Finance Act, 2000. 47. Section 9A alongwith Secti.on 9 was substituted for the then existing Section by Act 31 of 1958, w.e.f. 1-10-1958. 48. Section 96 inserted by Act 61 of 1972, w.e.f. 1-4-1973. 49. Substituted for Clause (a) by Act 61 of 1972, w.e.f. 1-4-1973. has reason to believe, to be false; or (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 the 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 goods for any of the purposes specified in 5O[clause (b) or clause (c) or clause (d)] of sub-section (3) of Section 8 fails, without reasonable excuse, to make use of the goods for any such purpose; (e) has in his possession any form prescribed for the purpose of sub-section (4) 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 thereunder; . 51[(f) collects any amount by way of tax in contravention of the provisions contained in Section 9A]; he shall be punishable with simple imprisonment which may extend to six months, or with fine, or with both, 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. 52[10A. Imposition of penalty in lieu of prosecution:- 53[(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 54[the tax which would have been levied under subsection (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.] 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. 55[(2) The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of India in the manner provided in sub-section (2) of Section 9 (a) in the case of an offence tailing 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 offence had not been committed.] 11. Cognizance of offences: - (1) No Court shall take cognizance of any offence punishable under this Act or the Rules made thereunder 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, be 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 bailable. 12. Indemnity:-
No suit, prosecution or other legal proceeding shall lie against
any officer of the Government for anything which is in good faith
done or intended to be done under this Act or the Rules made thereunder. 51. Clause (f) inserted by Act 31 of 1958, w.e.f. 1-10-1958. 52. Section 10A inserted by Act 31 of 1958, w.e.f. 1-10-1958. 53. Section 10A renumbered as Sub-section (1) of that Section by Act 28 of 1969, w.e.f. 1-10-1958. 54. Substituted for "the tax which would have been levied under this Act in respect of the sale to him of the goods if the offence had not been committed" by Act 61 of 1972, w.e.f. 1-4-1973. 55. Sub-section (2) inserted by Act 28 of 1969, w.e.f. 1-10-1958. 55A.lnserted by Act 20 of 2002. 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 be refused and the form in which the certificate of registration may be given; 55A[(aa) the form and the manner for furnishing declaration under sub-section (8) of section8] (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 56[under clause (c) of sub-section (1) of Section 8A] in the process of such determination; (c) the cases of circumstances in which, and the conditions subject to which, any registration granted under this Act may be cancelled; 57[(d) the form in which and the particulars to be contained in any declaration or certificate to be given under this Act, 58[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 59[sub-section(2)]of Section 9; (g) the fees payable in respect of applications under this Act] 59A[(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 |