42 Composition of tax

42.  Composition of tax:-

       (1) (a) The State Government may, by a notification in the Official Gazette, provide for a scheme of composition, subject to such conditions and restrictions as may be provided therein, of tax payable by the dealers who are engaged in the business, as prescribed, of reselling at retail, any goods or merchandise and different types of schemes may be notified for different classes of retailers.

            (b)  For the purpose of 1[this sub-section], a dealer shall be considered to be engaged in the business of selling at retail if 9/10th of his turnover of sales consists of sales made to persons who are not dealers and if any question arises as to whether any particular dealer is a retailer, 2[then the question shall be referred] to the Joint Commissioner, who shall after hearing the dealer, if necessary, decide the question. The order made by the Joint Commissioner shall be final.

            (c)  Nothing in this sub-section shall apply to a dealer who is a manufacturer or who is an importer or who purchases any goods from a registered dealer whose sales of the said goods are not liable to tax by virtue of the provisions contained in 3[sub-section (1) of section 8] or who sells at retail liquor including liquor imported from out of India, Indian Made Foreign Liquor or Country Liquor 4[except as provided in sub-section (2)]

     (2)  The State Government may, by a notification in the Official Gazette, provide for a scheme of composition, subject to such conditions and restrictions as may be provided therein, of tax payable by dealers who are running any eating house, restaurant, hotel, refreshment room or boarding establishment 5[***] and the tax payable by dealers who are caterers and serve food and non-alcoholic drinks 6[or tax payable by dealers running bakeries or dealers of second hand motor vehicles whose principal business is buying or selling motor vehicles 7[or vendors selling Indian Made Foreign Liquor or Country Liquor at retail and holding licence in Form FL II appended to the Bombay Foreign Liquor Rules, 1953 or in Form CL III or in Form CL/FL/TOD/III appended to the Maharashtra Country Liquor Rules, 1973, framed under the Bombay Prohibition Act, 1949]

    7[(3) Where a dealer is liable to pay tax on the sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lump-sum by way of composition,—

(a)      equal to five per cent. of the total contract value of the works contract in the case of a construction contract, and

(b)      eight per cent. of the total contract value of the works contract in any other case, after deducting from the total contract value of the works contract, the amount payable towards sub-contract involving goods to a registered sub-contractor.

         Explanation.—For the purposes of this sub-section,—

         (i)  “construction contract “ shall mean construction contract as may be notified by the State Government in the Official Gazette, from time to time, and

         (ii) “the amount payable towards sub-contract involving goods “ means the aggregate value of the goods on which tax is paid and the quantum of said tax paid by the sub- contractor or the subcontract value on which tax by way of composition is paid by the sub-contractor, as the case may be.

8 [(3A) The State Government may, by notification published in the Official Gazette,-

         (a) Provide a scheme of composition for the registered dealers who undertake the construction of flats, dwellings or buildings or premises and transfer them in pursuance of an agreement along with the land or interest underlying the land;

         (b) prescribe the rate of tax by way of composition, in lieu of the amount of tax payable on the transfer of goods (whether as goods or in some other form), in the execution of such works contracts by such registered dealer under this Act.]

     (4)  Where a dealer is liable to pay tax 9[in respect of any period on or after the appointed day] on sales effected by way of the transfer of the right to use mandap or tarpaulin (whether or not for a specified period), then he may, subject to such conditions and restrictions, as may be prescribed, pay in lieu of the amount of tax payable by him a sum equal to one and half per cent. of the turnover of sales effected by him.

    Explanation.—For the purposes of this sub-section, the transfer of the right to use mandap includes the transfer of the right to use mandap, pandal, shamiana or the decoration of such mandap, pandal or shamiana and the transfer of the right to use furniture, fixtures, lights and light fittings, floor coverings, utensils and other articles ordinarily used alongwith a mandap, pandal or shamiana.]

-------------------------------------------------------------------------------------------------

     1 These words were substituted for the words “this section” by Mah. Act No. XXXII of 2006, dt. 5.8.2006  w.e.f. 20.6.2006.

       2 These words were  substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

       3 These words and figures were substituted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

      4.   These words were inserted by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006.

     5.  These words were deleted by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

     6. These words were added by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

  7.  Sub-section (3) was substituted by Mah. Act No. XXXII of 2006, dt. 5.8.2006 w.e.f. 20.6.2006.  Prior to substituted the “Sub-section (3)”   was read as under :-

           “(3)  (a) Where a dealer is liable to pay tax on sales effected by way of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, he may subject to such restrictions and conditions as may be prescribed, in lieu of the amount of tax payable by him under this Act, whether in respect of the entire turnover of sales effected by way of works contract or in respect of any portion of the turnover corresponding to individual works contract, pay lump sum tax by way of composition equal to eight per cent. of the total contract value of the works contract [after deducting from the total contract value of the works contract the amount payable towards sub-contract to sub­-contractor]”

        •This “Portion” was added by Mah. Act No. XIV of 2005, dated the 31st March, 2005 w.e.f. 1.4.2005.

   8. Sub-section (3A) was inserted and shall be deemed to have been inserted w.e.f. 1 st April, 2010  by Mah. Act No. XII of 2010 dt.29.04.2010.

          9. These words were inserted by Mah. Act No. XXV of 2007, dt. 6.8.2007 w.e.f. 15.8.2007 as per Notification No. VAT.1507/CR-  57 /Taxation-1, dt. 10.8.2007.