Karnataka Sales Tax Act 1957 Chapter III - Citation 59104 - Bare Act

Act Info:

¹ [(1) Every dealer shall pay for each year tax on his taxable turnover at the rate of ² [ten percent] at the point of first sale.]

3 [Provisos x x x]

4 [(1-A) x x x]

5 [(1-B) Notwithstanding anything contained in sub-section (1), in the case of ⁶ [x x x] glass bottles, the tax shall be payable by a dealer, at every point of sale at the rate of ² [ten per cent] on the taxable turnover, in each year relating to such goods.]

7 [² [(1-C) Notwithstanding anything contained in sub-section (1), in the case of silk fabrics, the tax shall be payable by a dealer, at every point of sale at the rate of four percent on the taxable turnover in each year relating to such goods:

Provided where the own manufactured silk fabrics are sold to a dealer liable to tax under this Act, the sale of such silk fabrics shall not be deemed to be a sale by a dealer liable to tax under this Act.]

Explanation.--For the purpose of this sub-section and sub-section (8) of section 17, "silk fabrics" means ⁸ [silk fabrics in which the proportion of silk is sixty percent or more by weight of the total fibre content] but excluding any cloth on which a duty under the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (Central Act 58 of 1957), has been levied.]

⁹ [(1-D x x x ]

10 [(2) Notwithstanding anything contained in sub-section (5), ¹ [every dealer,] shall, whatever be the quantum of his total turnover, be liable to pay tax at the rate specified in this Act, ¹¹ [on the sale of any goods which he has purchased in the course of inter-State trade or commerce in respect of which the concessional rate of tax under clause (b) of sub-section (1) of section 8 of the Central Sales Tax Act, 1956, has been levied.]]

(3) Notwithstanding anything contained in sub-section (1), the tax under this Act shall be levied--

(a) in the case of the sale of any of the goods mentioned in column(2) of the Second Schedule, by the first or the earliest of successive dealersin the State who is liable to tax under this section, a tax at the rate specified in the corresponding entry of column (3) of the said Schedule, on the ¹² [taxable turnover] of sales of such dealer in each year relating to such goods:

¹³ [Provided that in respect of sale by the State Government of any of the goods mentioned in ¹⁴ [Serial Number 6 of Part 'L' and Serial Number 2 of Part 'O'] of the Second Schedule, the State Government shall be deemed to be the first dealer in the State and shall be entitled to collect the tax under section 19:]

15 [2nd proviso x x x]

15 [Explanation x x x]

16 [Proviso x x x]

17 [Provided also that in respect of sale of goods mentioned in ¹⁸ [Serial Number 11-A of Part 'F', Serial Number 12 of Part 'M' and ¹⁹ [Serial Number 5 of Part 'P' and Serial Number 1 of Part 'K'],] of the Second Schedule, the sale by one oil company to another oil company shall not be deemed to be a sale by the first or the earliest of successive dealers in the State but the sale by the latter company to another person not being an oil company shall be deemed to be the sale by the first or the earliest of successive dealers in the State liable to tax.]

20 [²¹ [Provided further that where any goods liable to tax under this Act are produced or manufactured by a dealer with the ²² [brand name or trade mark], of any other dealer and which are not used by the latter as ²³ [raw materials, component parts or packing materials] as defined under the explanation to section 5-A, the sale of such goods by the dealer who has produced or manufactured to the dealer who is the brand name or trade mark holder, shall not be deemed to be, but the subsequent sale of such goods by the dealer having the right either as proprietor or otherwise to use the said name or the trade mark, either directly or through another, on his own account or on account of others shall be deemed to be the sale by the first dealer liable to tax under this section.]

Illustration.--'A' has registered a Trade Mark for manufacture of certain goods. He gets the said goods manufactured by 'B' under the said Trade Mark. The sale by 'B' to 'A' of the said goods is not the first sale but the sale by 'A' or by any other person on his account is the first sale.]

24 [Provided also that no tax under this sub-section shall be payable on the currency notes printed by the Bharatiya Reserve Bank Note Mudrana Limited, Mysore and sold to the Reserve Bank of India.]

25 [Provided also that where for any reason, the goods sold under the brand name have been subjected to tax at the hands of the producer or the manufacturer of such goods the tax payable under clause (a) on subsequent sale of such goods by the trademark holder or the brand name holder or any other dealer having the right either as proprietor or otherwise to use the said name or trade mark either directly or through another on his own account or on account of others, shall be reduced by the amount of tax already paid on the sale of such goods by such producer or the manufacturer and the said producer or manufacturer shall not be entitled to refund of such tax paid by him.]

(b) in the case of purchase of any of the goods mentioned in column (2) of the Third Schedule, at the rate and only at the point specified in the corresponding entries of columns (4) and (3) of the said Schedule, on the dealer liable to tax under this Act, on his ¹² [taxable turnover] of purchases in each year relating to such goods.

²⁶ [Proviso x x x]

27 [(c) x x x]

17 [Explanation II.-- For the purpose of the ¹⁹ [second] proviso to clause (a), the expression "oil company" namely means:--

(a) The Indian Oil Corporation Limited;

(b) The Bharath Petroleum Corporation Limited;

²⁸ [(d) Indo-Burma Petroleum Company;

(e) Mangalore Refinery and Petrochemicals Limited;] and includes any other oil company which the Government of Karnataka may by notification, specify.]

²⁹ [(3A) Notwithstanding anything contained in clause (a) of sub--section (3) of this section, in the case of sale of Indian made liquor (other thanbeer) held in opening stock as on the date of commencement of the Karnataka Taxation Laws (Amendment) Act, 2000 by a dealer holding licence in CL-I under the Karnataka Excise (Sale of Indian and Foreign liquor) Rules, 1968, tax at the rate of sixty per cent shall be levied on the taxable turnover of sales of such dealer relating to such goods :

Provided that the tax payable on the sale of such liquor shall be reduced by an amount of tax paid on such liquor at the immediately preceding point of sale.]

30 [(3B) x x x]

³¹ [(3-C) Notwithstanding anything contained in sub-section (3), in the case of sale of any of the goods mentioned in column (2) of the Eighth Schedule which has already been subjected to tax under ⁴ [x x x] clause (a) of subsection (3) by a dealer liable to tax under this Act, a tax at the rate specified in the corresponding entry of column (3) of the said schedule shall be levied at the point of last sale in the State on the taxable turnover of sales of such dealer in each year relating to such goods.]

32 [Explanation.--For the purposes of this sub-section last sale shall be the sale by the retailer to a consumer and shall not include the first sale in the State.]

33 [(3-D) Notwithstanding anything contained in this Act, where goods sold or purchased are contained in containers or are packed in any packing materials liable to tax under this Act, the rate of tax and the point of levy applicable to turnover of such containers or packing materials as the case may be, shall, whether the containers or the packing materials have already been subjected to tax under this Act or not or whether the price of the containers or of the packing materials is charged for separately or not, be the same as those applicable to goods contained or packed:

Provided that no tax under this sub-section shall be leviable if the sale or purchase of goods contained in such containers or packed in such packing materials is exempt from tax under this Act.]

29 [(3E) Notwithstanding anything contained in sub-section (1) or (3), every dealer who purchases goods without a brand name or a trade mark assigned to such goods and sells such goods after assigning a brand name or a trade mark either directly or through another on his own account or on account of others, shall, irrespective of the goods so purchased without a brand name or a trade mark have already been subjected to tax under the said sub-sections, be liable to pay tax at such rates as applicable to such goods under the Act on the turnover relating to sale of such goods:

Provided that the tax payable under this sub-section shall be reduced by an amount of tax which is already paid or has become payable under any of the said sub-sections on the corresponding value of the goods so purchased without the brand name or the trade mark:

Provided further that the burden of proving that the tax under any of the said sub-sections has already been paid or has become payable and of establishing the exact quantum of tax so paid or payable as the case may be, on goods purchased without a brand name or a trade mark shall be on the dealer claiming reduction.]

10 [(4) Notwithstanding anything contained in sub-section (1) ¹⁷ [or section 5-B or section 5-C] a tax under this Act shall be levied in respect of the sale or purchase of any of the declared goods mentioned in column (2) of the Fourth Schedule at the rate and only at the point specified in the corresponding entries of columns (4) and (3) of the said Schedule on the dealer liable to tax under this Act on ¹² [his taxable turnover] of sales or purchases in each year relating to such goods:

Provided that where tax has been paid in respect of the sale or purchase of any of the declared goods under this sub-section and such goods are subsequently sold in the course of inter-State trade or commerce, ³⁴ [and tax has been paid under the Central Sales Tax Act, 1956 (Central Act 74 of 1956), in respect of the sale of such goods in the course of inter-State trade or commerce, the tax paid under this Act] ³⁵ [³⁶ [shall be reimbursed to the person making such sale in the course of inter-State trade or commerce,] in such manner and subject to such condition as may be prescribed.]

37 [Proviso x x x]

38 [Provisoes x x x]

39 [Provided further that in respect of the sale of cereals mentioned in Serial Number 9 of the Fourth Schedule, made by any person to a procurement agent appointed by the Government of Karnataka or to any sub-agent of such procurement agent in pursuance of the Karnataka Rice Procurement (Levy) Order, 1981 or any other Foodgrains Procurement (Levy) Order of the Government of Karnataka for the time being in force, such sale shall not be deemed to be, but the subsequent sale by the said procurement agent or sub-agent shall be and shall be deemed to be the point at which the tax under this Act shall be levied:]

40 [Provided also that where tax has been paid under this sub-section on the purchase of paddy and such paddy is either subsequently sold to or is hulled and the resultant rice is sold to a procurement agent appointed by the Government of Karnataka or to any sub-agent of such procurement agent in pursuance of the Karnataka Rice Procurement (Levy) Order, 1984 or any other Foodgrains Procurement (Levy) Order of the Government of Karnataka for the time being in force, the tax paid under this Act on the purchase of such paddy shall be reimbursed to the person making such sale to such procurement agent or his sub-agent, as the case may be, in such manner and subject to such conditions as may be prescribed.]

Explanation.--The expression "declared goods" means goods declared under section 14 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), to be of special importance in inter-State trade or commerce.]

41 [Provided also that in respect of goods specified at sub-item (i) of item

(a) of serial number 5 of Fourth Schedule and on purchase of which notax under this Act is leviable or levied on or before first day of April 1992 on the ground that such purchase was not the last purchase in the State, a dealer holding such goods in stock on the said date shall be deemed to be the last purchaser in the State liable to tax at the rates applicable as on the first day of April 1992 on such goods irrespective of the fact whether such stock of goods held as on the first day of April 1992 attained the character of last purchase in the State or otherwise.]

42 [Proviso x x x]

⁴³ [(5)(a) A dealer whose total turnover in any year is less than ⁴⁴ [two lakh] rupees shall not be liable to pay tax for that year.

⁴⁵ [(b) Notwithstanding anything contained in clause (a),--

(i) every casual trader in any of the goods other than those specified in the Fifth Schedule shall be liable to pay tax at the rate specified in this Act on his taxable turnover of sales or purchases in each year whatever his total turnover during the year may be;

(ii) every ⁴⁶ [x x x] manufacturer, dealer in liquor and beer and dealer who brings any goods into the State or to whom any goods are dispatched from any place outside the State shall be liable to pay tax at the rate specified in this Act on his taxable turnover of sales or purchases in each year if his total turnover during the year is not less than one lakh rupees.]]

⁴⁷ [(5A), (5B) x x x]

(6) For the purposes of this section and other provisions of this Act, ¹² [the total turnover, taxable turnover or turnover] shall be determined in accordance with such rules as may be prescribed.

(7) The tax shall be assessed, levied and collected in such manner andin such instalments, if any, as may be prescribed:

Provided that in respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed:

⁴⁸ [Proviso x x x]

49 [(8) x x x]

(9) Subject to such rules as may be prescribed, the assessing authoritymay assess a dealer for any year as if his transactions in such year had been the same as in the previous year.

________________________________

1. Substituted by Act 11 of 1993 w.e.f. 1.4.1993.

2. Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

3. Provisoes were inserted and omitted by Acts 18 of 1994 and 6 of 1995 w.e.f. different dates.

4. Inserted by Act 15 of 1988 w.e.f. 1.4.1988 & omitted by Act 5 of 2000 w.e.f. 1.4.2000.

5. Inserted by Act 11 of 1993 w.e.f. 1.4.1993.

6. Omitted by Act 5 of 1996 w.e.f. 1.4.1996.

7. Inserted by Act 1 of 1996 w.e.f. 1.4.1995.

8. Substituted by Act 15 of 1996 w.e.f. 1.4.1995.

9. Inserted by Act 4 of 1999 w.e.f. 1.4.1999 & Omitted by Act 5 of 2000 w.e.f. 1.4.2000.

10. Substituted by Act 31 of 1958 w.e.f. 1.1.1959.

11. Substituted by Act 3 of 1966 w.e.f. 1.3.1966 by notification. Text of notification is at page 430

12. Substituted by Act 9 of 1964 w.e.f. 1.4.1964.

13. Inserted by Act 32 of 1958 w.e.f. 1.10.1957.

14. Substituted by Act 15 of 1988 w.e.f. 1.4.1988.

15. Omitted by Act 15 of 1988 w.e.f. 1.4.1988.

16. Inserted by Act 7 of 1981 and Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

17. Inserted by Act 27 of 1985 w.e.f. 1.8.1985.

18. Substituted by Act 5 of 1996 w.e.f. 1.4.1996.

19. Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

20. Inserted by Act 14 of 1987 w.e.f. 1.4.1987.

21. Substituted by Act 4 of 1992 w.e.f. 1.4.1987.

22. Substituted by Act 4 of 1999 w.e.f. 1.4.1999.

23. Substituted by Act 4 of 1992 w.e.f. 1.4.1990.

24. Inserted by Act 18 of 1999 w.e.f. 1.4.1996.

25. Inserted by Act 18 of 1999 w.e.f. 1.9.1999by notification. Text of notification is at p 431.

26. Inserted by Act 4 of 1992 w.e.f. 3.3.1992 & omitted by the same Act w.e.f. 31.3.1992.

27. Inserted by Act 30 of 1987 w.e.f. 21.4.1987 & omitted by Act 4 of 1992 w.e.f. 1.4.1992.

28. Inserted by Act 7 of 1997 w.e.f. 1.4.1997.

29. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

30. Omitted by Act 10 of 1983 w.e.f. 1.4.1983.

30. Inserted by Act 27 of 1985 w.e.f. 1.8.1985 & substituted by Act 9 of 1986 w.e.f. 1.4.1986

31. Inserted by Act 4 of 1992 w.e.f. 1.4.1992 & substituted by Act 5 of 2000 w.e.f. 1.4.2000.

32. Inserted by Act 9 of 1986 w.e.f. 1.4.1986.

33. Substituted by Act 7 of 1973 w.e.f. 1.1.1959.

34. Substituted by Act 29 of 1961 w.e.f. 7.12.1961.

35. Substituted by Act 7 of 1973 w.e.f. 1.4.1973.

36. Omitted by Act 9 of 1970 w.e.f. 1.4.1970.

37. Omitted by Act 30 of 1962 w.e.f. 1.10.1962.

38. Inserted by Act 3 of 1983 w.e.f. 1.1.1959.

39. Inserted by Act 30 of 1987 w.e.f. 1.4.1987..

40. Inserted by Act 4 of 1999 w.e.f. 2.4.1992.

41. Inserted by Act 4 of 1999 w.e.f. 1.4.1998 & omitted by same Act w.e.f. 24.11.1998.

42. Sub-section (5) Substituted by Act 9 of 1964 w.e.f. 1.4.1964.

43. Substituted by Act 4 of 1992 w.e.f. 1.10.1991.

44. Substituted by Act 4 of 1992 w.e.f. 1.4.1992.

45. Omitted by Act 6 of 1995 w.e.f. 1.4.1995.

46. Omitted by Act 7 of 1966 w.e.f. 1.4.1966.

47. Omitted by Act 9 of 1964 w.e.f. 1.10.1957.

48. Omitted by Act 12 of 1961 w.e.f. 8.6.1961.

Section 5 - Levy of tax on sale or purchase of goods

¹ [(1) Every dealer shall pay for each year tax on his taxable turnover at the rate of ² [ten percent] at the point of first sale.]

3 [Provisos x x x]

4 [(1-A) x x x]

⁹ [(1-D x x x ]

(3) Notwithstanding anything contained in sub-section (1), the tax under this Act shall be levied--

15 [2nd proviso x x x]

15 [Explanation x x x]

16 [Proviso x x x]

24 [Provided also that no tax under this sub-section shall be payable on the currency notes printed by the Bharatiya Reserve Bank Note Mudrana Limited, Mysore and sold to the Reserve Bank of India.]

²⁶ [Proviso x x x]

27 [(c) x x x]

17 [Explanation II.-- For the purpose of the ¹⁹ [second] proviso to clause (a), the expression "oil company" namely means:--

(a) The Indian Oil Corporation Limited;

(b) The Bharath Petroleum Corporation Limited;

²⁸ [(d) Indo-Burma Petroleum Company;

(e) Mangalore Refinery and Petrochemicals Limited;] and includes any other oil company which the Government of Karnataka may by notification, specify.]

Provided that the tax payable on the sale of such liquor shall be reduced by an amount of tax paid on such liquor at the immediately preceding point of sale.]

30 [(3B) x x x]

32 [Explanation.--For the purposes of this sub-section last sale shall be the sale by the retailer to a consumer and shall not include the first sale in the State.]

Provided that no tax under this sub-section shall be leviable if the sale or purchase of goods contained in such containers or packed in such packing materials is exempt from tax under this Act.]

37 [Proviso x x x]

38 [Provisoes x x x]

41 [Provided also that in respect of goods specified at sub-item (i) of item

42 [Proviso x x x]

⁴³ [(5)(a) A dealer whose total turnover in any year is less than ⁴⁴ [two lakh] rupees shall not be liable to pay tax for that year.

⁴⁵ [(b) Notwithstanding anything contained in clause (a),--

⁴⁷ [(5A), (5B) x x x]

(6) For the purposes of this section and other provisions of this Act, ¹² [the total turnover, taxable turnover or turnover] shall be determined in accordance with such rules as may be prescribed.

(7) The tax shall be assessed, levied and collected in such manner andin such instalments, if any, as may be prescribed:

Provided that in respect of the same transaction of sale, the buyer or the seller, but not both, as determined by such rules as may be prescribed, shall be taxed:

⁴⁸ [Proviso x x x]

49 [(8) x x x]

(9) Subject to such rules as may be prescribed, the assessing authoritymay assess a dealer for any year as if his transactions in such year had been the same as in the previous year.

________________________________

1. Substituted by Act 11 of 1993 w.e.f. 1.4.1993.

2. Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

3. Provisoes were inserted and omitted by Acts 18 of 1994 and 6 of 1995 w.e.f. different dates.

4. Inserted by Act 15 of 1988 w.e.f. 1.4.1988 & omitted by Act 5 of 2000 w.e.f. 1.4.2000.

5. Inserted by Act 11 of 1993 w.e.f. 1.4.1993.

6. Omitted by Act 5 of 1996 w.e.f. 1.4.1996.

7. Inserted by Act 1 of 1996 w.e.f. 1.4.1995.

8. Substituted by Act 15 of 1996 w.e.f. 1.4.1995.

9. Inserted by Act 4 of 1999 w.e.f. 1.4.1999 & Omitted by Act 5 of 2000 w.e.f. 1.4.2000.

10. Substituted by Act 31 of 1958 w.e.f. 1.1.1959.

11. Substituted by Act 3 of 1966 w.e.f. 1.3.1966 by notification. Text of notification is at page 430

12. Substituted by Act 9 of 1964 w.e.f. 1.4.1964.

13. Inserted by Act 32 of 1958 w.e.f. 1.10.1957.

14. Substituted by Act 15 of 1988 w.e.f. 1.4.1988.

15. Omitted by Act 15 of 1988 w.e.f. 1.4.1988.

16. Inserted by Act 7 of 1981 and Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

17. Inserted by Act 27 of 1985 w.e.f. 1.8.1985.

18. Substituted by Act 5 of 1996 w.e.f. 1.4.1996.

19. Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

20. Inserted by Act 14 of 1987 w.e.f. 1.4.1987.

21. Substituted by Act 4 of 1992 w.e.f. 1.4.1987.

22. Substituted by Act 4 of 1999 w.e.f. 1.4.1999.

23. Substituted by Act 4 of 1992 w.e.f. 1.4.1990.

24. Inserted by Act 18 of 1999 w.e.f. 1.4.1996.

25. Inserted by Act 18 of 1999 w.e.f. 1.9.1999by notification. Text of notification is at p 431.

26. Inserted by Act 4 of 1992 w.e.f. 3.3.1992 & omitted by the same Act w.e.f. 31.3.1992.

27. Inserted by Act 30 of 1987 w.e.f. 21.4.1987 & omitted by Act 4 of 1992 w.e.f. 1.4.1992.

28. Inserted by Act 7 of 1997 w.e.f. 1.4.1997.

29. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

30. Omitted by Act 10 of 1983 w.e.f. 1.4.1983.

30. Inserted by Act 27 of 1985 w.e.f. 1.8.1985 & substituted by Act 9 of 1986 w.e.f. 1.4.1986

31. Inserted by Act 4 of 1992 w.e.f. 1.4.1992 & substituted by Act 5 of 2000 w.e.f. 1.4.2000.

32. Inserted by Act 9 of 1986 w.e.f. 1.4.1986.

33. Substituted by Act 7 of 1973 w.e.f. 1.1.1959.

34. Substituted by Act 29 of 1961 w.e.f. 7.12.1961.

35. Substituted by Act 7 of 1973 w.e.f. 1.4.1973.

36. Omitted by Act 9 of 1970 w.e.f. 1.4.1970.

37. Omitted by Act 30 of 1962 w.e.f. 1.10.1962.

38. Inserted by Act 3 of 1983 w.e.f. 1.1.1959.

39. Inserted by Act 30 of 1987 w.e.f. 1.4.1987..

40. Inserted by Act 4 of 1999 w.e.f. 2.4.1992.

41. Inserted by Act 4 of 1999 w.e.f. 1.4.1998 & omitted by same Act w.e.f. 24.11.1998.

42. Sub-section (5) Substituted by Act 9 of 1964 w.e.f. 1.4.1964.

43. Substituted by Act 4 of 1992 w.e.f. 1.10.1991.

44. Substituted by Act 4 of 1992 w.e.f. 1.4.1992.

45. Omitted by Act 6 of 1995 w.e.f. 1.4.1995.

46. Omitted by Act 7 of 1966 w.e.f. 1.4.1966.

47. Omitted by Act 9 of 1964 w.e.f. 1.10.1957.

48. Omitted by Act 12 of 1961 w.e.f. 8.6.1961.

Section 5A - Taxation of Industrial Inputs

¹ [5A. Taxation of Industrial Inputs

(1) Notwithstanding anything contained in section 5 the tax payable by a registered dealer in respect of the sale of any industrial input liable to tax under the Act to another registered dealer for use by the latter as a component part or raw material ² [or packing material] of any other goods ³ [x x x] which he intends to manufacture inside the State for sale ⁴ [or in respect of sale of consumables liable to tax under the Act to another registered dealer for use in such manufacture], shall be at the rate of ⁵ [three percent] or the rate specified in section 5 whichever is lower, on the turnover relating to such sale:

Provided that where the rate of tax in respect of such industrial input as specified in section 5 is ⁶ [⁵ [three percent] and above], the provisions of this sub-section shall not apply, unless the dealer selling the industrial inputs furnishes to his assessing authority in the prescribed manner a declaration by the buying dealer in the prescribed form obtained from the prescribed authority:

Provided further that if any dealer, after purchasing any inputs, in respect of which he has furnished a declaration under the first proviso to this subsection fails to make use of the whole or part of such inputs in the manufacture of ⁷ [other goods] specified in the declaration before the expiry of the accounting year immediately succeeding the one in which such inputs are purchased, either due to cessation of his manufacturing activity or for any other reason, but has not sold away such inputs, he shall be liable to pay the difference between the tax payable at the rate specified under ⁸ [section 5] and the tax computed at the rate of ⁵ [three percent] on the turnover relating to the sale of such quantity of these inputs to him as have remained unutilised with him for the declared purpose at the end of the period specified above.

(2) If any person,--

(i) not having his manufacturing unit inside the State, purchases any inputs by furnishing a declaration under the first proviso to subsection (1); or

⁹ [(ii) x x x]

3 [(iii) x x x]

(iv) having his manufacturing unit inside the State and having purchased any inputs by furnishing a declaration under the first proviso to sub-section (1), sells away such inputs contrary to such declaration, the assessing authority, after giving such person a reasonable opportunity of being heard, shall, by order in writing, impose upon him by way of penalty a sum, which shall not be less than the amount of tax leviable ¹⁰ [under sections 5] on the sale of the inputs so purchased, but which shall not exceed double the amount of such tax.

¹¹ [(v) having his manufacturing unit inside the State and having purchased any inputs by furnishing a declaration under first proviso to subsection (1), uses such inputs contrary to such declaration, the assessing authority, after giving such person a reasonable opportunity of being heard, shall, by order in writing, impose upon him by way of penalty a sum which shall not be less than twice the amount of tax leviable under section 5 but not exceeding thrice the amount of such tax on the sale of the inputs so purchased.]

(3)(a) Every dealer who, during the course of the year, purchases any inputs by furnishing a declaration under the first proviso to sub-section (1), shall maintain in the prescribed manner a regular account of the receipt and issue of such declaration forms as and when the same are received or issued by him.

(b) Every such dealer shall also maintain in the prescribed manner a day to day account of the opening balance, purchases, consumption and closing balance of every input, which is purchased by him by furnishing a declaration under the first proviso to sub-section (1).

(c) If any dealer fails to maintain, in the prescribed manner, true and complete accounts as required by clause (a) or clause (b) of this subsection, the assessing authority shall, after giving such dealer a reasonable opportunity of being heard pass an order,--

(i) disentitling such dealer from making use of any declaration forms prescribed under the first proviso to sub-section (1) and requiring him to surrender forthwith the declaration forms already issued to him, if any; and

(ii) imposing upon him a penalty not exceeding the amount of tax leviable under the provisions of ⁸ [section 5] on the sale value of the inputs already purchased by him against prescribed declaration forms upto the date of surrender of the unused forms by him.

(d) If any dealer, in respect of whom an order has been passed under clause (c) of this sub-section, pays the penalty and complies with other terms of such order, the assessing authority may, in his discretion, permit such dealer to obtain the prescribed declaration forms afresh and to make use of the same for the purchase of inputs in the State at concessional rates of tax.

¹² [Explanation I].--(1) For the purpose of this section, the expressions "industrial inputs" or "inputs", mean either a "component part" or "raw material" ² [or packing material] but do not include, ¹³ [cement] ¹⁴ [x x x] ¹⁵ [wood, bamboo and timber ¹⁶ [x x x ] ¹⁷ [(other than veneer)] ⁴ [casuarina, eucalyptus and pulpwood] ¹⁸ [and packing shooks] and] inputs-falling under ¹⁹ [Serial Number 12 of Part "S" and Serial Number 10 of Part "M"] of the Second Schedule ⁹ [x x x].

(2) The expression "component part" means an article which forms anidentifiable constituent of the finished product and which, along with others, goes to make up the finished product.

(3) The expression "raw material" means any material,--

(a) from which another product can be made, through the process ofmanufacture, either by itself or in combination with other raw materials; or

(b) a processing or any other chemical (including chemicals used fortesting, analysis or research) solvent used in the solvent extraction process or a catalyst required in the manufacturing process, but it does not include ²⁰ [x x x] fuels, ²¹ [x x x] and consumable stores of similar type.]

22 [(4) The expression "consumables" does not include petroleum products falling under serial number 11A of Part "F" serial number 12 of Part 'M' and serial number 5 of Part "P" of the Second Schedule.]

23 [Explanation II.--For the purposes of this section, the expression "tax payable" shall not include the tax payable under section 6-B of the Act.]

________________________________

1. Inserted by Act 10 of 1983 w.e.f. 1.4.1983.

2. Inserted by Act 36 of 1986 w.e.f. 1.4.1983.

3. Omitted by Act 9 of 1986 w.e.f. 1.4.1986.

4. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

5. Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

6. Substituted by Act 15 of 1996 w.e.f. 5.9.1996.

7. Substituted by Act 15 of 1988 w.e.f. 1.4.1986.

8. Substituted by Act 9 of 1986 w.e.f. 1.4.1986.

9. Omitted by Act 23 of 1983 w.e.f. 1.4.1983.

10. Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

11. Inserted by Act 16 of 1989 w.e.f. 1.4.1989.

12. Renumbered by Act 4 of 1992 w.e.f. 1.4.1983.

13. Inserted by Act 4 of 1999 w.e.f. 1.4.1999.

14. Inserted by Act 9 of 1986 w.e.f. 1.4.1986 & omitted by Act 7 of 1997 w.e.f. 1.4.1997.

15. Inserted by Act 23 of 1983 w.e.f. 18.11.1983.

16. Inserted by Act 18 of 1994 w.e.f. 18.11.1983 &omitted by the same Act w.e.f. 1.4.1988.

17. Inserted by Act 15 of 1988 w.e.f. 1.4.1988.

18. Inserted by Act 18 of 1994 w.e.f. 1.4.1994.

19. Substituted by Act 15 of 1988 w.e.f. 1.4.1988.

20. Omitted by Act 14 of 1987 w.e.f. 8.10.1986.

21. Omitted by Act 15 of 1996 w.e.f. 5.9.1996.

22. Inserted by Act 5 of 2000 w.e.f. 1.4.2000 & substituted by Act 25 of 2000 w.e.f. 1.4.2000.

23. Inserted by Act 4 of 1992 w.e.f. 1.4.1983.

Section 5A - Taxation of Industrial Inputs

¹ [5A. Taxation of Industrial Inputs

(2) If any person,--

(i) not having his manufacturing unit inside the State, purchases any inputs by furnishing a declaration under the first proviso to subsection (1); or

⁹ [(ii) x x x]

3 [(iii) x x x]

(2) The expression "component part" means an article which forms anidentifiable constituent of the finished product and which, along with others, goes to make up the finished product.

(3) The expression "raw material" means any material,--

(a) from which another product can be made, through the process ofmanufacture, either by itself or in combination with other raw materials; or

23 [Explanation II.--For the purposes of this section, the expression "tax payable" shall not include the tax payable under section 6-B of the Act.]

________________________________

1. Inserted by Act 10 of 1983 w.e.f. 1.4.1983.

2. Inserted by Act 36 of 1986 w.e.f. 1.4.1983.

3. Omitted by Act 9 of 1986 w.e.f. 1.4.1986.

4. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

5. Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

6. Substituted by Act 15 of 1996 w.e.f. 5.9.1996.

7. Substituted by Act 15 of 1988 w.e.f. 1.4.1986.

8. Substituted by Act 9 of 1986 w.e.f. 1.4.1986.

9. Omitted by Act 23 of 1983 w.e.f. 1.4.1983.

10. Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

11. Inserted by Act 16 of 1989 w.e.f. 1.4.1989.

12. Renumbered by Act 4 of 1992 w.e.f. 1.4.1983.

13. Inserted by Act 4 of 1999 w.e.f. 1.4.1999.

14. Inserted by Act 9 of 1986 w.e.f. 1.4.1986 & omitted by Act 7 of 1997 w.e.f. 1.4.1997.

15. Inserted by Act 23 of 1983 w.e.f. 18.11.1983.

16. Inserted by Act 18 of 1994 w.e.f. 18.11.1983 &omitted by the same Act w.e.f. 1.4.1988.

17. Inserted by Act 15 of 1988 w.e.f. 1.4.1988.

18. Inserted by Act 18 of 1994 w.e.f. 1.4.1994.

19. Substituted by Act 15 of 1988 w.e.f. 1.4.1988.

20. Omitted by Act 14 of 1987 w.e.f. 8.10.1986.

21. Omitted by Act 15 of 1996 w.e.f. 5.9.1996.

22. Inserted by Act 5 of 2000 w.e.f. 1.4.2000 & substituted by Act 25 of 2000 w.e.f. 1.4.2000.

23. Inserted by Act 4 of 1992 w.e.f. 1.4.1983.

Section 5B - Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts

¹ [5-B. Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts

Notwithstanding anything contained in sub-section (1) or ² [sub-section (3) or sub-section (3-C) of section 5, but subject to sub-section (4), (5) or (6)] of the said section, every dealer shall pay for each year, a tax under this Act on his taxable turnover of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract mentioned in column (2) of the Sixth Schedule at the rates specified in the corresponding entries in column (3) of the said Schedule.

________________________________

1. Sections 5B and 5C inserted by Act 27 of 1985 w.e.f. 1.4.1986 by notification. Text ofthe notification is at page 431.

2. Substituted by Act 4 of 1992 w.e.f. 1.4.1986.

Section 5B - Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts

¹ [5-B. Levy of tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of works contracts

________________________________

1. Sections 5B and 5C inserted by Act 27 of 1985 w.e.f. 1.4.1986 by notification. Text ofthe notification is at page 431.

2. Substituted by Act 4 of 1992 w.e.f. 1.4.1986.

Section 5C - Levy of tax on the transfer of the right to use any goods

¹ [5C. Levy of tax on the transfer of the right to use anygoods

Notwithstanding anything contained in sub-section (1) or sub-section (3) of section 5, but subject to sub-sections (4), (5) and (6) of the said section, every dealer shall pay for each year a tax under this Act on his taxable turnover in respect of the transfer of the right to use any goods mentioned in column (2) of the Seventh Schedule for any purpose (whether or not for a specified period) at the rates specified in the corresponding entries in column (3) of the said Schedule:]]

² [Provided that no tax shall be levied under this section if the goods in respect of which the right to use is transferred, have been subjected to tax under section 5.]

________________________________

1. Substituted by Act 5 of 1996 w.e.f. 1.4.1986.

2. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

Section 5C - Levy of tax on the transfer of the right to use any goods

¹ [5C. Levy of tax on the transfer of the right to use anygoods

² [Provided that no tax shall be levied under this section if the goods in respect of which the right to use is transferred, have been subjected to tax under section 5.]

________________________________

1. Substituted by Act 5 of 1996 w.e.f. 1.4.1986.

2. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

Section 6 - Levy of purchase tax under certain circumstances

¹ [6. Levy of purchase tax under certaincircumstances

Subject to the provisions of sub-section (5) of section 5, every dealer who in the course of his business purchases any taxable goods in circumstances in which no tax under section 5 is leviable on the sale price of such goods and,

(i) either consumes such goods in the manufacture of other goods for sale or otherwise ² [or consumes otherwise,] or disposes of such goods in any manner other than by way of sale in the State, or

(ii) despatches them to a place outside the State except as a direct result of sale or purchase in the course of inter-State trade or commerce, shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under section 5:

Provided that this section shall not apply,--

³ [(i) in respect of sale or purchase of goods specified in the Fourth Schedule,--

(a) which are taxable at the point of purchase; and

(b) which have already been subjected to tax under sub-section (4) of section 5.]

(ii) in respect of sale or purchase of goods specified in the Second Schedule which have already been subject to tax under clause (a) of subsection (3) of section 5.]

4 [x x x]

5 [Explanation.--For the purpose of this section "consumes such goods in the manufacture" shall include goods consumed for ancillary purposes in or for such manufacture.]

________________________________

1. Substituted by Act 9 of 1970 w.e.f. 1.4.1970.

2. Inserted by Act 8 of 1989 w.e.f. 8.9.1988.

3. Substituted by Act 78 of 1976 w.e.f. 7.12.1976.

4. Clauses (iia), (iii), (iv), (v) and proviso inserted and omitted by Acts 6 of 1995, 27 of 1985 and 14 of 1987 w.e.f. different dates.

5. Inserted by Act 8 of 1989w.e.f. 1.4.1970.

Section 6 - Levy of purchase tax under certain circumstances

¹ [6. Levy of purchase tax under certaincircumstances

(i) either consumes such goods in the manufacture of other goods for sale or otherwise ² [or consumes otherwise,] or disposes of such goods in any manner other than by way of sale in the State, or

Provided that this section shall not apply,--

³ [(i) in respect of sale or purchase of goods specified in the Fourth Schedule,--

(a) which are taxable at the point of purchase; and

(b) which have already been subjected to tax under sub-section (4) of section 5.]

(ii) in respect of sale or purchase of goods specified in the Second Schedule which have already been subject to tax under clause (a) of subsection (3) of section 5.]

4 [x x x]

5 [Explanation.--For the purpose of this section "consumes such goods in the manufacture" shall include goods consumed for ancillary purposes in or for such manufacture.]

________________________________

1. Substituted by Act 9 of 1970 w.e.f. 1.4.1970.

2. Inserted by Act 8 of 1989 w.e.f. 8.9.1988.

3. Substituted by Act 78 of 1976 w.e.f. 7.12.1976.

4. Clauses (iia), (iii), (iv), (v) and proviso inserted and omitted by Acts 6 of 1995, 27 of 1985 and 14 of 1987 w.e.f. different dates.

5. Inserted by Act 8 of 1989w.e.f. 1.4.1970.

Section 6A - Burden of proof

1 [6A. Burden ofproof

(1) For purposes of assessment of tax under this Act, the burden of proving that any transaction or any turnover of a dealer is not liable to tax shall lie on such dealer.

(2) Notwithstanding anything contained in this Act or in any other law, a dealer in any of the goods liable to tax in respect of the first sale or first purchase in the State shall be deemed to be the first seller or first purchaser, as the case may be, of such goods and shall be liable to pay tax accordingly on his turnover of sales or purchases, relating to such goods, unless he proves that the sale or purchase, as the case may be, of such goods had already been subjected to tax under this Act.]

2 [Provided that where goods liable to tax are iron and steel mentioned in serial number 2 of the Fourth Schedule, oil seeds mentioned in serial number 5 of the Fourth Schedule, bauxite,chromite, iron, manganese and other ores mentioned in serial number 1 of Third Schedule or hydrogenated oils and cooking medium mentioned in serial number 1 of Part 'E' of Second Schedule, ³ [or any other goods liable to tax as may be notified by the Commissioner] every dealer in such goods shall furnish a declaration duly filled and signed by the registered dealer from whom such goods are purchased containing the prescribed particulars in a prescribed form obtained from the assessing authority to prove that the sale or purchase, as the case may be, of such goods had already been subjected to tax and the seller of such goods shall issue the declaration to the buying dealer;]

⁴ [(3) Where a dealer knowingly issues or produces a false bill, voucher, declaration, certificate or other document with a view to support or make any claim that a transaction of sale or purchase effected by him or any other dealer, is not liable to be taxed, ⁵ [or liable to tax at a lower rate] the assessing authority shall, on detecting such issue or production, direct the dealer issuing or producing such document to pay as penalty,--

(i) in the case of first such detection, three times the tax due in respectof such transaction; and

(ii) in the case of second or subsequent detection, five times the taxdue in respect of such transaction:

Provided that before issuing any direction for the payment of the penalty under this section, the assessing authority shall give to the dealer an opportunity of making representation against the levy of such penalty.]

________________________________

1. Inserted by Act 9 of 1964 w.e.f. 1.10.1957.

2. Inserted by Act 6 of 1995 w.e.f. 1.4.1995.

3. Inserted by Act 15 of 1996 w.e.f. 5.9.1996.

4. Inserted by Act 23 of 1983 w.e.f. 18.11.1983.

5. Inserted by Act 18 of 1994 w.e.f. 18.11.1983.

Section 6A - Burden of proof

1 [6A. Burden ofproof

(1) For purposes of assessment of tax under this Act, the burden of proving that any transaction or any turnover of a dealer is not liable to tax shall lie on such dealer.

(i) in the case of first such detection, three times the tax due in respectof such transaction; and

(ii) in the case of second or subsequent detection, five times the taxdue in respect of such transaction:

________________________________

1. Inserted by Act 9 of 1964 w.e.f. 1.10.1957.

2. Inserted by Act 6 of 1995 w.e.f. 1.4.1995.

3. Inserted by Act 15 of 1996 w.e.f. 5.9.1996.

4. Inserted by Act 23 of 1983 w.e.f. 18.11.1983.

5. Inserted by Act 18 of 1994 w.e.f. 18.11.1983.

Section 6B - Levy of turnover tax

¹ [6B. Levy of turnover tax

² [(1) Every registered dealer and every dealer who is liable to get himself registered under sub-sections (1) and (2) of section 10 whose total turnover in a year is not less than the turnovers specified in the said sub-section 5 whether or not the whole or any portion of such turnover is liable to tax under any other provisions of this Act, shall be liable to pay tax,--

(i) at the rate of one and half per cent of the total turnover, if the total turnover is not more than one thousand lakh rupees in a year; or

(ii) at the rate of three per cent of the total turnover, if the total turnover is more than one thousand lakh rupees in a year:

Provided that the rate of tax payable for any year shall be at one and half per cent on the turnovers upto one thousand lakh rupees and at three per cent on the turnovers exceeding one thousand lakh rupees, if the total turnover in the year immediately preceding that year was not more than one thousand lakh rupees]

² [Provided further that] no tax under this sub-section shall be payable on that part of such turnover which relates to,--

(i) sale or purchase of goods specified in the Fifth Schedule;

(ii) sale or purchase of goods specified in the Fourth Schedule;

(iii) sale or purchase of goods in the course of inter-State trade or commerce;

(iv) sale or purchase of goods in the course of export out of the territory of India or sale or purchase in the course of import into the territory of India;

(v) all amounts collected by way of tax under the provisions of this Act or the Central Sales Tax Act, 1956 (Central Act 74 of 1956);

(vi) all amounts falling under the head "freight", when specified and charged for by the dealer separately without including such amounts in the price of the goods sold; and

³ [(vii) x x x]

⁴ [(viii) turnover relating to sales of agricultural produce by a commission agent or broker on behalf of principals who are agriculturists;]

⁵ [(ix) all amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of a contract or agreement entered into in a particular case and provided also that the accounts show that the purchaser has paid only the sum originally charged less discount;

(x) (a) all amounts allowed to purchases in respect of goods returnedby them to the dealer when the goods are taxable on sales provided that the goods were returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made;

(b) all amounts received from the sellers in respect of goodsreturned to them by the dealer; when the goods are taxable on the purchase value provided that the goods were returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was received;]

6 [(xi) such amounts towards labour charges and other like charges not involving any transfer of property in goods, actually incurred in connection with the execution of works contract, or calculated at the rates prescribed;]

7 [(xii) all amounts realised by a dealer by the sale of his business as a whole;]

8 [(xiii) x x x ]

9 [(xiv) the total amount paid or payable by the dealer as a consideration for the purchase of any of the goods in respect of which tax is leviable at the point of sale;

(xv) the total amount paid or payable to the dealer as a consideration for the sale of any of the goods in respect of which tax is leviable at the point of purchase;]

10 [(xvi) x x x] ¹¹ [(xvii) the turnover relating to the currency notes printed by the Bharatiya Reserve Bank Note Mudrana Limited, Mysore and sold to the Reserve Bank of India.] ¹² [Provided also that] save as otherwise provided in this sub-section, no other deduction shall be made from the total turnover of a dealer for the purposes of this section:

¹³ [Provisos x x x]

(2) The provisions of this Act and the rules made there under shall, sofar as may be, apply in relation to the assessment, collection or refund of the turnover tax, as they apply in relation to the assessment, collection or refund of tax under the other provisions of this Act.]

________________________________

1. Inserted by Act 16 of 1975 w.e.f. 1.4.1975 & substituted by Act 13 of 1982 w.e.f. 29.3.1981.

2. Substituted by Act 5 of 2000 w.e.f. 1.4.2000.

3. Omitted by Act 11 of 1993 w.e.f. 1.4.1993.

4. Inserted by Act 23 of 1983 w.e.f. 18.11.1983.

5. Inserted by Act 27 of 1985 w.e.f. 1.8.1985 and by Act 9 of 1986 brought into force from18.11.1983

6. Inserted by Act 30 of 1987 w.e.f. 1.4.1986.

7. Inserted by Act 11 of 1993 w.e.f. 1.4.1993.

8. Inserted by Act 4 of 1999 and omitted by Act 5 of 2000 w.e.f. 1.4.2000.

9. Inserted by Act 18 of 1999 w.e.f. 29.3.1981.

10. Inserted by Act 18 of 1999 w.e.f. 1.4.1986 & omitted by the same Act w.e.f. 1.4.1998.

11. Inserted by Act 18 of 1999 w.e.f. 1.4.1996.

12. Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

13. Provisos inserted and omitted by Acts 18 of 1994, 4 of 1992, 30 of 1987, 27 of 1985, 6 of 1995 and 5 of 2000 w.e.f. different dates.