3 Incidence and levy of tax

Chapter-II

Incidence and levy of tax

3. (1) Every dealer who would have continued to be liable to pay tax under the Act of 1973 had this Act not come into force, and every other dealer whose gross turnover during the year immediately preceding the appointed day exceeded the taxable quantum as defined or specified in the Act of 1973, shall, subject to the provisions of sub-section (4), be liable to pay tax on and from the appointed day on the sale of goods effected by him in the State.

(2) Every dealer to whom sub-section (1) does not apply and who is of the class or classes mentioned in column 2 of the Table below and whose gross turnover in any year first exceeds the taxable quantum specified in column 3 there against, shall, subject to the provisions of sub-section (4), be liable to pay tax on and from the day mentioned in column 4 there against on the sale of goods effected by him in the State –

Table

Serial No.

 Description of class or classes of dealers Taxable quantum

Day on and from

which the dealer is liable to tax

1 2 3 4
1.

Dealer who sells or purchases any goods in the course of inter-State trade or commerce or in the course of export of the goods out of, or the import of the goods into, the territory of India

 Nil

On and from the day he makes such sale or purchase for the first time

2.

Dealer who imports any goods into State

 Nil

On and from the day he imports any goods into State for the first time

 

3. Dealer who purchases any goods in the Sate and exports out of State such goods or the goods manufactured there from Nil On and from the day he makes purchase of such goods in the State for the first time
4.

Dealer who is a brick-kiln owner or a Halwaii or a liquor licensee under the Punjab Excise Act, 1914 (1 of 1914), or who deals in minerals, lottery tickets or such other goods as may be prescribed

 Nil

On and from the day his gross turnover in any year first exceeds the taxable quantum

 

5.

Any other class or classes of dealers

 

One lakh rupees or such other sum as may be prescribed and different sums including nil may be prescribed for different classes of dealers

On and from the day following the day his gross turnover in any year first exceeds the taxable quantum

 

Provided that this sub-section shall not apply to a dealer who deals exclusively in exempted goods.

Note – Where a dealer is covered under more than one of the class or classes mentioned in the Table above, the liability to pay tax shall commence from the earliest day he becomes liable to tax.

(3) If a dealer liable to pay tax under sub-section (1) or sub-section (2) purchases any taxable goods in the State from any source in the circumstances that no tax is levied or paid under this Act on their sale to him and he either exports them out of State or uses or disposes them of in the circumstances in which no tax is payable under this Act or the Central Act by him to the State on them or the goods manufactured therefrom, then, he shall, subject to the provisions of sub-section (4), be liable to pay tax on the purchase thereof:

Provided that where such goods (except those specified in Schedule F) or the goods manufactured therefrom are sold in the course of export of the goods out of the territory of India, no tax shall be levied on their purchase:

Provided further that where the goods purchased are used or disposed of partly in the circumstances mentioned in the foregoing provisions of this sub-section and partly otherwise, the tax leviable on such goods shall be computed pro rata.

(4) The tax levied under sub-sections (1), (2) and (3) shall be calculated on the taxable turnover, determined in accordance with the provisions of section 6, at the rates of tax applicable under section 7, and where the taxable turnover is taxable at different rates of tax, the rate of tax shall be applied separately in respect of each part of the taxable turnover liable to a different rate of tax.

(5) If the tax calculated under sub-section (4) is more than the input tax, determined in accordance with the provisions of section 8, the difference of the two shall be the tax payable; and if the input tax is more than the tax calculated,the excess amount shall be either refundable or adjustable with future tax liability in accordance with the provisions of section 20; but if the input tax is a negative value on account of reversal of input tax under the second proviso to sub-section (1) of section 8, the absolute value thereof shall be added to the tax calculated under sub-section (4) and the resultant amount shall be the tax payable.

Illustration –

Serial No.

Tax calculated under sub-section (4)

 Input tax Tax payable

Refundable/ Adjustable

1. Rs. 100 Rs. 50 Rs. 50 Nil
2. Rs. 100 Rs. 150 Nil Rs. 50
3. Rs. 100 (-) Rs. 50 Rs. 150 Nil

(6) Every dealer who has become liable to pay tax, shall continue to be so liable until after the expiry of three consecutive years during each of which his gross turnover has failed to exceed the taxable quantum and such further period after the date of such expiry, as may be prescribed, and on the expiry of this latter period his liability to pay tax shall cease.

(7) Every dealer, whose liability to pay tax has ceased under the provisions of sub-section (6), shall again be liable to pay tax in accordance with the provisions of sub-section (2).