Tamil nadu act 038 of 1996 : Tamil Nadu General Sales Tax (Third Amendment) Act, 1996

Section 1. Short title and commencement

1. Short title and commencement.- (1) This Act may be called the Tamil Nadu General Sales Tax (Third Amendment) Act, 1996.

(2)(a) Section 6 shall be deemed to have come into force on the 1st day ei April, 1996.

(b) Sections 3, 5, 7 and 9 shall be deemed to have come into force on the 17th day of July, 1996.

(c) Section 8 shall come into force atonce.

(d) Sections 2 and 4 shall come into force on the 1st day of November, 1995.

Section 2. Amendment of section 2

2. Amendment of section 2.- In section 2 of the Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu ??? 1959) (hereinafter ??? to as the principal Act),-

(l) alter clause (m), the following clause shall be inserted, namely:-

"(mm)" "resale" for the purpose of section 3-C means the sale of goods mentioned in the First Schedule or the Sixth Schedule, purchase within the State, in the same form in which such goods are purchased or with modifications improvements thereto which do not amount to manufacture.

Explanation.-For the purpose of this clause, ‘sale of goods’ shall mean sale of goods at points other than the point of levy specified in the respective Schedule";

(2) after clause (r), the following clause shall be substituted, namely:-

"(rr) "turnover or resale" for the purpose of section 3-C means the value added on the resale of goods mentioned in the First Schedule or the Sixth Schedule at all places of his business in the State, by any dealer, arrived at after deducting from the turnover of sale, the turnover relating to the goods bought from a registered dealer within the State.

Explanation,-For the purpose of this clause, ‘goods bought’ shall also include packing materials, labels and such goods which are consumed or used for carrying out modification or improvements, if any, on the goods before re-sale".;

Section 3. Amendment of section 3

3. Amendment of section 3.- In section 3 of the principal Act,-

(1) in sub-section (1), for the expression "is not less than one lakh of rupees", the expression "exceeds three lakhs of rupees" shall be substituted;

(2) in sub-section (2), after the proviso, the following proviso shall be added, namely:

"Provided further that in the case of goods mentioned in the First Schedule which are taxable at the point of first sale, the tax under this Act shall be payable by the first or earliest of the successive dealers in the State who is table to fax under this section;

(3) In sub-section (3),-

(a) for the expression "mentioned in the First Schedule, other than those falling under item 56 in Part D of the said Schedule", the expression "other than those falling under item 22 in Part D mentioned in the First Schedule, goods falling under Part A of the Third Schedule, goods falling under item 1 of the Sixth Schedule" shall be substituted.

(b) in the first proviso, for clause (a), the following clause shall be substituted, namely:-

"(a) any sale of goods falling under items 1 and 2 in Part-F and item 2 in Part-I of the said Schedule; and"

(4) after sub-section (4), the following sub-section shall be inserted, namely:-

"(5) Notwithstanding anything contained in sub-section (2), but subject to the provisions of sub-section (1), the tax payable by dealer in respect of sale of any of the goods mentioned in, item 34 in Part-C items 24, 32, 36 and 40 in Part-D and item 10 in Part-E of the First Schedule, to any other dealer, for installation of, and use in, his factory site situate within the State for the manufacture of any goods shall be at the rate of three per cent on the turnover relating to such sale:

Provided that the provisions of this sub-section shall not apply to any sale, unless the dealer selling such goods furnishes to the assessing authority in the prescribed manner and within the prescribed period, a declaration duly filled in and signed by the dealer to whom the goods are sold, containing the prescribed particulars in the prescribed form obtained from the prescribed authority:

Provided further that any such dealer, who after purchasing the goods in respect of which he had furnished any declaration, fails to install the goods and make use of the goods so purchased for the purpose specified in the declaration or disposes of such goods in any other manner within a period of five years shall pay the difference of tax payable on the turnover relating to sale of such goods at the rate prescribed and three per cent".

Section 4. Insertion of new section 3-C

4. Insertion of new section 3-C.- After section 3-B of the principal Act, the following section shall be inserted, namely:-

"3-C. Levy of value added tax.-

Notwithstanding anything contained in sub-sections (1), (2) and (2-B) of section 3 and sections 3-A and 3-B, every dealer whose total turnover for a year exceeds seventy five lakhs of rupees shall pay a tax on the turnover of resale of goods at the rate specified in the respective Schedule in such manner prescribed".

Section 5. Insertion of new sections 4-E and 5

5. Insertion of new sections 4-E and 5.- After section 4-D of the principal Act, the following sections shall be inserted, namely:-

"4-E. Refund of Tax in certain cases.-

A registered 100 percent export oriented unit or unit located in the Madras Export Processing Zone shall be entitled for Refund of the whole of the tax paid by it on the purchase of any goods including consumable packing materials and labels, but excluding plant and machinery, which has been use by such unit in the manufacture and assembling, packing of labelling of goods manufactured within the State and sold by way of export by such unit;

Provided that the unit shall satisfy such conditions and shall submit an application for refund in such manner and in such form as may be prescribed.

5. Tax on goods purchased by dealers registered under Central Act 74 of 1956.-

Notwithstanding anything contained in sub-section (1) of section 3, ovary dealer registered under sub-section (3) of section 7 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) shall, whatever be the quantum of his turnover, pay tax for each year in respect of the sale of goods with reference to the purchase of which he has furnished a declaration under sub-section (4) of section 8 of the said Central Act, at the rates specified under sub-sections (2) and (2B) of section 3 or section 3-A or 3-B or 4."

Section 6. Insertion of now section 7-E

6. Insertion of now section 7-E.- After section 7-D of the principal Act, the following soul ion shall be inserted, namely:-

"7-E. Payment of tax at compounded rates.-

(1) Notwithstanding anything contained in sub-section (2) of section 3 and section 4, every dealer (other than a causal trader or an agent of a non-resident dealer),-

(a) whose total turnover exceeds three lakhs of rupees but does not exceed ten lakhs of rupees in the immediately, preceding year, or

(b) whose total turnover would exceed three lakhs of rupees but would not exceed ten lakhs of rupees in the immediately preceding year if proportionately calculated for a full year with reference to his turnover for the actual period of business, may, at his option, instead of paying tax in accordance with the provisions of sub-section (2) of section 3 or section 4, as the case may be, pay tax at the following rates, namely:-

Provided that such dealer shall not be required to maintain detailed commodity-wise accounts, other than purchase and sale bills and total accounts relating to monthly sales, monthly tax collection and tax payments annual purchases and annual opening and closing stocks:

Provided further that this sub-section shall not apply to-

(a) any dealer whose total turnover exceeds rupees ten lakhs in the course of a year; or

(b) any dealer who has issued declaration under sub-section (4) of section 8 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) for the purchase of goods, in relation to the turnover relating to sale of such goods.

(2) Every dealer who opts for payment of tax at the compounded rate, shall apply to the assessing authority in such form as may be prescribed, on or before the 30th day of April of the year, exercising his option to pay tax as specified under sub-section (1) and shall pay tax in advance during the year in monthly instalments, and, for this purpose, he shall furnish such returns within such period and in such manner as may be prescribed:

Provided that the option under this sub-section for the year commencing on the 1st day of April, 1996 shall be exercised, on or before the 31st day of October, 1996.

(3) The option so exercised under this section shall be final for that year and shall continue for subsequent years until the dealer becomes ineligible, or withdraws his option in writing.

(4) A dealer who has been permitted to pay the tax under sub-section (1) shall not collect any amount by way of tax or purporting to be by way of tax on the sale so long as he opts to pay the tax as provided under sub-section (1)".

Section 7. Amendment of section

7. Amendment of section.- ???

Provided that subject to the provisions of clause (b) and the provisions of sub-section (1-A), a dealer whose total turnover does not exceed ten lakhs of rupees per ??? may make a self-assessment for that year and the return filed by him shall be ??? without calling for the accounts;

(b) A dealer shall not be eligible for making self-assessment,-

(i) for a successive period of three years, including the year of assessment, if he is found to have suppressed his sale or purchase turnover at the time of inspection in the year of assessment; or

(ii) if the proof of payment of tax admitted by him in his return has not accompanied the return; or

(iii) if he is doing his business for the first year or last year:

Provided that where a dealer claims refund of tax exceeding ten thousand rupees, he shall file all the relevant accounts and records in connection with such claim for scrutiny by the assessing authority.

(1-A) Notwithstanding anything contained in the proviso to clause (a) of sub-section (1), twenty-five per cent of the total number of such assessments shall be selected by the Commissioner in such manner as may be prescribed for the purpose of detailed scrutiny regarding the correctness of the return submitted by the dealer in this connection and in such-cases, final assessment orders shall be passed in accordance with the provisions of this Act."

Section 8. Amendment of section 21

8. Amendment of section 21.- In section 21 of the principal Act,-

(1) in sub-section (1),

(a) for the expression "one hundred rupees", the expression "two hundred rupees" shall be substituted;

(b) the following proviso shall be added, namely:-

"Provided that any dealer who has registered under the companies Act, 1956 (Central Act 1 of 1956) or who has been doing business continuously for a period of five years and who desires to pay a registration fee for five years in a lumpsum may do so at his option by paying a sum of rupees one thousand for the principal place of business and rupees one hundred in respect of each of his additional places of business other than the principal place of business";

(2) in sub-section (3), for the expression "shall be valid for a year", the expression "shall be valid for one year or five yeas, as the case may be", shall be substituted.

Section 9. Amendment of section 45

9. Amendment of section 45.- In section 45 of the principal Act, in sub-section (2), in clause (e), for the expression "under the proviso to sub-section (3) of section 3", the expression "under the second proviso to sub-section (3) or sub-section (5) of section 3" shall be substituted.