Tamil Nadu General Sales Tax (Seventh Amendment) Act, 2002*
| [Tamil Nadu Act No. 22 of 2002] | [26th May, 2002] |
An Act further to amend the Tamil Nadu General Sales Tax Act, 1959
Be it enacted by the Legislative Assembly of the State of Tamil Nadu in the Fifty-third Year of the Republic of India as follows:-
* Received the assent of the Governor on the 26th May, 2002 and published in the Tamil Nadu Government Gazette, Extraordinary.
1. Short title and commencement.- (1) This Act may be called the Tamil Nadu General Sales Tax (Seventh Amendment) Act, 2002.
(2) It shall come into force on such date as the State Government may, by notification, appoint.
2. Amendment of section 2.- In the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act ??? 1959) (herein after referred to as the principal Act), in section 2,-
(1) in clause (g), after the Explanation (2), the following Explanation shall be added, namely:-
"Explanation (3).- Each of the following persons or bodies who dispose of any goods including unclaimed or confiscated or unserviceable or scrap surplus, old or obsolete goods or discarded material or waste products whether by auction or otherwise directly or through an agent for cash or for deferred payment or for any other valuable consideration, notwithstanding anything contained in this Act, shall be deemed to be a dealer for the purposes of this Act to the extent of such disposals, namely:-
(a) Port trust;
(b) Municipal Corporations, Municipal Councils and other local authorities constituted under any law for the time being in force;
(c) Railways administration as defined under the Railways Act, 1989 (??? Act 24 of 1989);
(d) Shipping, transport and construction companies;
(e) Air Transport Companies and Airlines;
(f) Any person holding permit for the transport vehicles granted under the Motor Vehicles Act, 1988 (??? Act 59 of 1988) which are used or adopted to be used for hire;
(g) The Tamil Nadu State Road Transport Corporations;
(h) Department of the Government of India administering the ??? Act, 1962 (??? Act ??? of 1962);
(i) Insurance and Financial Corporations or Companies and Banks included in the Second Schedule to the Reserve Bank of India Act, 1934 (??? Act ??? of 1934);
(j) Advertising agencies; and
(k) Any other Corporation, Company, body or authority owned or set up by, or subject to administrative control of, the Central Government or any State Government.
(2) for clause (kk), the following clauses shall be substituted, namely:-
"(kk) ??? means tax paid or payable by ???
(kkk) ??? Commission ??? under section 28."
(3) in clause (mm), for the expression "section 3-C means the sale of goods mentioned in the First Schedule or the Sixth Schedule", the expression "section 3-H means the sale of goods mentioned in the First Schedule or the Eleventh Schedule" shall he substituted;
(4) in clause (n), after Explanation (1-B), the following Explanation shall be inserted, namely:-
"Explanation (1-C).- Every transfer of property in goods including goods as unclaimed or confiscated or as unserviceable or as scrap surplus, old, obsolete or discarded materials or as waste products, by the persons or bodies referred to in Explanation (3) in clause (g) of section 2 of this Act, for cash or for deferred payment or for any other valuable consideration whether or not in the course of business shall be deemed to be a sale for the purposes of this Act."
(5) after clause (o), the following clauses shall be inserted, namely:-
"(oo) "surcharge" means surcharge on tax levied under this Act;
(ooo) "tax" means and includes a sales tax, purchase tax, resale tax or surcharge, as the case may be, payable under this Act;";
(o) clause (rr) shall be omitted.
3. Amendment of section 3.- In section 3 of the principal Act,-
(1) in sub-section (2), the word "only" shall be omitted;
(2) after sub-section (2-B), the following sub-section shall be inserted, namely:-
"(2-C) Subject to the provisions of sub-section (1), in the case of goods mentioned in the Eleventh Schedule, the ??? under this Act shall be payable by a dealer at the rate and at the point specified therein on the turnover or quantity in each year relating to such goods."
4. Substitution of section 3-C.- For section 3-C, the following section shall be substituted, namely:-
"3-C. Input tax credit.- (1) Notwithstanding anything contained in sub-section (2) of section 3, every dealer shall pay tax at the rate specified in the First Schedule, on every sale made by him within the State, in respect of goods as may be notified by the Government from among the goods specified in the First Schedule.
(2) A registered dealer shall be entitled to claim input tax credit, subject to such conditions as may be prescribed."
5. Omission of section 3-F.- Section 3-F of the principal Act shall be omitted.
6. Insertion of new sections 3-H, 3-I and 3-J.- After section 3-G of the principal Act, the following sections shall be inserted, namely:-
"3-H. Levy of resale tax.- Notwithstanding anything contained in sub-sections (1) and (2) of section 3, every dealer, other than the dealer liable to pay tax under section 3-J, whose total turnover is not less than ten lakhs of rupees for the year, shall pay a resale tax at such rate not exceeding one per cent as may be fixed by the Government, by notification, on the turnover of resale of goods specified in the First Schedule and the Eleventh Schedule other than the goods notified by the Government under section 3-C, at a point other than the point of levy specified therein:
Provided that any resale turnover included in the total turnover of a dealer paying tax under sub-section (2) of section 3-D and sections 3-E, 7-C, 7-D and 7-E is not liable for resale tax:
Provided further that the goods taxable at the point of last purchase in the state are not liable to resale tax.
Explanation.- For the purpose of this section, the turnover of resale in respect of goods taxable at the point of first purchase means the sales turnover of such goods at all points of sale by subsequent dealers.
3-I. Levy of surcharge:- A surcharge at the rate of five per cent shall be levied on the tax levied under sub-sections (2), (2-C), (3) and (5) of section 3, sections 3-A, 3-B and 3-C, sub-section (1) of section 3-D and sections 3-G, 3-J, 5, 7-A and 7-C and at the first point of sale in the State under sub-section (2-A) of section 3.
3-J. Levy of tax on trade mark holder.- Notwithstanding anything contained in this Act, whenever a dealer, who holds the trade mark or the patent thereof, sells goods other than the declared goods at any point of sale other than the first point of sale, he shall be deemed to be the first seller in the State and shall be liable to pay tax accordingly and for determining the tax due to be paid by him, the tax levied and collected, if any at the immediate preceding point of sale, on the same goods shall be deducted from the tax payable by him at that point of sale."
7. Amendment of section 7-A.- In section 7-A of the principal Act,-
(1) in clause (b), the word "or" shall be omitted;
(2) in clause (c), the word "or" shall be added at: the end;
(3) after clause (c) as so amended, the following clause shall be added, namely:-
"(d) installs and uses such goods in the factory for the manufacture of any goods."
8. Amendment of section 7-C.- In section 7-C of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely:-
"(2-A) Notwithstanding anything contained in sub-section (2), any dealer who executes works contract may apply to the assessing authority along with the first monthly return on the commencement of each works contract, his option to pay the tax under sub-section (1) in respect of each works contract."
9. Amendment of section 7-F.- In Section 7-F of the principal Act,-
(1) in sub-section (1), in the proviso, in clause (b), for the expression "a certificate" the expression "a certificate in such form as may be prescribed" shall be substituted;
(2) to sub-section (4), the following proviso shall be added, namely:-
"Provided that the burden of proving that the tax on such works contract has already been deposited and of establishing the exact quantum of tax so deposited shall be on the dealer claiming the deduction.";
(3) after sub-section (7), the following sub-section shall be added, namely:-
"(8) If any person contravenes the provisions of sub-section (1) or sub-section (2), the whole amount of tax payable shall be recovered from such person and all provisions of this Act for the recovery of tax including those relating to levy of penalty and interest shall apply, as if the person is an assessee for the purpose of this Act.
10. Amendment of section 12.- In section 12 of the principal Act,-
(1) for sub-section (1), the following sub-section shall be substituted, namely:-
"(1)(a) The assessment in respect of a dealer shall be on the basis of the return relating to his turnover submitted in the prescribed manner within the prescribed period.
(b) Notwithstanding anything contained in clause (a) of this sub-section, a dealer whose turnover which includes the total turnover under this Act, inter-State sales, export sales and stock transfers to outside the State does not exceed ten crores of rupees in a year, may make a self-assessment for that year in the manner and subject to such conditions as may be prescribed.
(c) The provisions of clause (b) and sub-section (1-A) shall apply to the assessments for the financial years commencing from the 1st day of April, 2001.";
(2) in sub-section (1-A), for the expression "in the provisos to clause (a) of sub-section (1), twenty per cent of the total number", the expression "in clause (b) of sub-section (I), five per cent of the total number" shall be substituted;
(3) in sub-section (2), after the expression "best of its judgement", the expression "subject to such conditions as may be prescribed" shall be added;
(4) in sub-section (3),-
(a) for the expression "under sub-section (2)" occurring in two places, the expression "under sub-section (1) or (2)" shall be substituted;
(b) in clause (c), after the proviso, the following proviso shall be inserted, namely:-
"Provided further that no penalty under this sub-section or the interest under sub-section (3) of section 24 of the Act, shall be imposed on the oil companies as explained in the Explanation-II of the Eleventh Schedule if the difference of tax due as per accounts and the tax paid as per the returns is less than five per cent and revised return is filed along with the difference of tax due within a period of three months from the due date for filing the monthly return."
11. Insertion of new section 12-B.- After section 12-A of the principal Act, the following section shall be inserted, namely:-
"12-B. Assessment of sales in certain cases.-(1) Notwithstanding anything contained in this Act but subject to the provisions of section 16, the assessment of a dealer in respect of the assessment for the period prior to the 1st day of April, 1999 shall he on the basis of the return relating to his turnover and on the basis of the ??? or certificate furnished on or before the 30th day of September, 2002 and such return shall be accepted subject to such conditions as may be prescribed:
Provided that this sub-section shall not apply to a dealer who has filed an appeal or other proceeding in respect of any assessment for the period referred to in the sub-section and is pending before the Special Tribunal, the High Court or the Supreme Court as the case may be.
(2) Every dealer who claims to ??? and ??? filed return, shall file the return on or before the ??? manner relating to his turnover for the period prior to the ??? and such return shall be accepted subject to the provisions of section ??? which ??? shall be cancelled after giving him a reasonable opportunity of being heard."
12. Amendment of section 13.- In section 13 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely:-
"(2-A) Notwithstanding anything contained in sub-sections (1) or (2), every dealer other than those paying tax under sub-section (2) of section 3-D, section 3-E, or 7-E, whose total turnover in the preceding year was not less than ten lakhs of rupees or his taxable turnover was not less than three lakhs of rupees and all dealers newly registered in the year shall pay tax in advance during the year on the basis of his actual turnover for each month or for such other periods, as may be prescribed."
13. Amendment of section 16.- In section 16 of the principal Act, in sub-section (1), for the expression "expiry of the year to which the tax relates" occurring in two places, the expression "date of order of the final assessment by the assessing authority" shall be substituted.
14. Amendment of section 16-A.- In section 16-A of the principal Act,-
(1) for the marginal heading and sub-section (1), the following shall be substituted, namely:-
Assessment of turnover not disclosed under the compounding provisions.- (1) Where for any reason, any part of the turnover of business of a dealer who has been permitted to pay tax under sub-section (2) of section 3-D, sections 3-E, 3-G or 7-E has escaped assessment from the tax, the assessing authority, may at any time within a period of five years from the date of order of the final assessment by the assessing authority, determine to the best of its judgement the turnover which has escaped assessment and reassess the tax payable on the total turnover including the turnover already assessed under the said sections."
(2) in sub-section (3), for the expression "under section 7 or section 7-B", the expression "under the sections referred to in sub-section (1)" shall be substituted.
15. Amendment of section 16-AA.- In section 16-A A of the principal Act, in sub-section (1), for the expression "expiry of the year to which the tax relates", the expression "date of order of the final assessment by the assessing authority" shall be substituted.
16. Amendment of section 16-AAA.- In section 16-AAA of the principal Act,-
(1) in sub-section (1), for the expression "expiry of the year in which the draw is held", the expression "date of order of final assessment by the assessing authority" shall be substituted;
(2) in sub-section (3), the expression "in pursuance of the option" shall be omitted.
17. Amendment of section 16-C.- In section 16-C of the principal Act,-
(1) for the expression "sections 16, 16-A, 16-AA and 16-B", the expression "sections 16, 16-A and 16-AA" shall be substituted;
(2) after clause (e), the following clauses shall be added, namely.-
"(f) in addition to the tax assessed under clauses (d) or (e), the dealer is liable to pay a penalty, at the rate specified in sub-section (3) of section 12 and the assessing authority shall in the same order of assessment or by a separate order direct the dealer to pay such penalty.
(g) in making the re-assessment under clauses (d) or (e), in addition to the tax assessed, the dealer is liable to pay a penalty, at the rate specified in sub-section (2) of section 16, if there is wilful non-disclosure of assessable turnover by the dealer to the satisfaction of the assessing authority."
18. Insertion of new section 16-D.- After section 16-C of the principal Act, the following section shall be inserted, namely:-
"16-D. Constitution of Special Committee.- (1) The Government shall appoint a Special Committee consisting of,-
(1) Secretary to Government, Commercial Taxes Department;
(2) Commissioner of Commercial Taxes; and
(3) Secretary to Government, Finance Department or his nominee.
(2) Notwithstanding anything contained in this Act the Special Committee may, of its own motion or on application, call for and examine the records of the assessing authority in respect of any proceeding or order under sub-section (2) or (3) of section 12 or sub-section (1) or (2) of section 16, if such proceeding or order is pissed in violation of the provisions of the Act or rules made thereunder or without following the principles of natural justice, set aside the said proceedings or order and direct the assessing authority to make a fresh assessment and pass fresh proceeding or order in such manner as may be directed:
Provided that such proceeding or order against which any appeal or writ is pending shall not be entertained under this sub-section.
(3) The order passed under sub-section (2) shall be final."
19. Amendment of section 36.- In section 36 of the principal Act, in sub-section (1), after the second proviso, the following proviso shall be added, namely:-
"Provided also that no appeal shall be admitted against an order, passed by the Appellate Assistant Commissioner under section 31 or by the Appellate Deputy Commissioner under section 31-A, as the case may be setting aside the assessment and directing the assessing authority to make a fresh assessment."
20. Insertion of new section 39.- After section 38-A of the principal Act, the following section shall be inserted, namely:-
"39. Constitution of Sales Tax Settlement Commission.- (1) The Government shall, by notification, constitute a Commission called "Sales Tax Settlement Commission" for the settlement of arrears of tax, additional sales tax, penalty or interest in respect of the following classes of dealers, namely:-
(a) Dealers who stopped business prior to the 1st day of April, 1995 and whose arrears are not covered by any appeal or revision as on the 28th day of February, 2002.
(b) Dealers in lottery tickets with arrears relating to the assessment years prior to the 1st day of April, 1996.
(c) Public Sector Undertakings including Oil Companies, Government Companies and Chennai Petroleum Corporation Limited.
(d) Dealers who have requested waiver of arrears of tax, surcharge, additional sales tax, penalty and interest for the assessment years prior to the 1st day of April, 1999 but no appeal or revision is pending as on the 28th day of February, 2002 on that matter.
(2) The Commission shall consist of chairman and such number of members not exceeding two, appointed by the Government, as it may, from time to time, consider necessary for the proper discharge of the functions conferred on the Commission under this Act.
(3) No person shad be appointed as Chairman or member of the Commission unless he possesses such qualifications as may be prescribed and for such period as may be specified in this behalf.
(4) Subject to the previous sanction of the Government, the Commission shall for the purpose of regulating its procedure and disposal of its business make regulations not inconsistent with the provisions of this Act and rules."
21. Amendment of First Schedule.- In the First Schedule to the principal Act, PART-G and the entries relating thereto, shall be omitted.
22. Amendment of Sixth Schedule.- In the Sixth Schedule to the principal Act, in item 1, in the entry in column (2), for the expressions, "item 5 of PART-G of the First Schedule" and "item I of PART-G of the First Schedule", the expressions "item 6 of the Eleventh Schedule" and "item I of the Eleventh Schedule", shall, respectively, be substituted.
23. Amendment of Ninth Schedule.- In the Ninth Schedule, for PART-B, the following PART shall be substituted, namely:-
"PART-B
(See section 3-E)
| Rate of Tax. | |
| (i) Where the total turnover exceeds three lakhs of rupees but does not exceed five lakhs of rupees. | Seven thousand and eight hundred rupees per annum. |
| (ii) Where the total turnover exceeds five lakhs of rupees but does not exceed ten lakhs of rupees. | Fifteen thousand and six hundred rupees per annum. |
| (iii) Where the total turnover exceeds ten lakhs of rupees but does not exceed twenty lakhs of rupees. | Thirty-one thousand and two hundred rupees per annum. |
| (iv) Where the total turnover exceeds twenty lakhs of rupees but does not exceed thirty lakhs of rupees. | Sixty-two thousand and four hundred rupees per annum. |
| (v) Where the total turnover exceeds thirty lakhs of rupees but does not exceed forty lakhs of rupees. | Ninety-three thousand and six hundred rupees per annum. |
| (vi) Where the total turnover exceeds forty lakhs of rupees but does not exceed fifty lakhs of rupees. | One lakh nine thousand and two hundred rupees per annum." |
24. Addition of new Schedule.- After the Tenth Schedule, the following Schedule shall be added, namely:-
"THE ELEVENTH SCHEDULE
[See section 3(2-C)]
| Serial Number. | Description of goods. | Point of levy. | Rate of tax. |
| (1) | (2) | (3) | (4) |
| 1. | Alcoholic liquors of all kinds for human consumption which are purchased/procured/brought from outside the State other than foreign liquors falling under item 5, toddy and arrack. | First sale | 55 per cent |
| 2. | Asphalt (bitumen) | First sale | 12 per cent |
| 3. | Aviation Gasoline | First sale | 24 per cent |
| 4. | Aviation turbine fuel including jet fuel | First sale | 24 per cent |
| 5. | Brake fluid | First sale | 12 per cent |
| 6. | Foreign liquors, that is to say, wines, spirits and beers imported into India from foreign countries and dealt with under the Indian Tariff Act, 1934 (Central Act 32 of 1934) of under any other law for the time being in force relating to the duties of customs on goods imported into India. | First sale | 70 per cent |
| 7. | Fuel gas including liquefied petroleum gas | First sale | 8 per cent |
| 8. | High Speed Diesel Oil | First sale | 22 per cent |
| 9. | Imported cigarettes, medium density fibre boards, textiles and other items falling in Parts D and E of the First Schedule. | First sale | 20 per cent |
| 10. | Kerosene | First sale | 4 per cent |
| 11. | Light Diesel Oil | First sale | 18 per cent |
| 12. | Lubricating oils, quenching oils and greases | First sale | 16 per cent |
| 13. | Mineral oils of all kinds other than those mentioned in item 12 of this Schedule and under item 3-A of the Second Schedule including furnace oil and Naphtha. | First sale | 16 per cent |
| 14. | Molasses | First sale | 30 per cent |
| 15. | Panmasala by whatever name called containing betel nuts, that is to say, nut of areca, catachu broken and perfumed with lime or menthol or sandal oil or cardamom or any one or more of these ingredients. | First sale | 40 per cent |
| 16. | Petrol | First sale | 28 per cent |
| 17. | Sugarcane | Last purchase | Rupees 60 per metric tonne. |
Explanation-I.- For the purpose of this Schedule, a sale of pevroleum product by one oil company to another oil company shall not be deemed to be the First sale in this State and any sale by one oil company to another person (not being an oil company) shall be deemed to be the First sale in the State.
Explanation-II.- For the purpose of Explanation-I, Oil company means (a) Chennai Petroleum Corporation Ltd., (b) The Indian Oil Corporation Ltd., (c) The Bharat Petroleum Corporation Ltd., (d) The Hindustan Petroleum Corporation Ltd., (c) Indo Burma Petroleum Company Ltd., and includes any other oil company as may be notified in this behalf by the Government in the Tamil Nadu Government Gazette.