15 Determination of taxable turnover by a person

CHAPTER-III

DETERMINATION OF TAXABLE TURNOVER AND CALCULATION OF NET TAX PAYABLE

15. Determination of taxable turnover by a person

(1) To determine the taxable turnover of sales, a person, shall deduct from his gross turnover of sales, the following :-

     (a) turnover of sales of goods, declared tax free under section 16 of the Act;

     (b) turnover of sales of goods, made outside the State or in the course of inter-state trade or commerce or in the course of import of goods into or export of goods out of the territory of India under section 84 of the Act;

     (c) turnover of goods, sent on consignment basis or branch transfers;

     (d) amount, charged separately as interest in the case of a hire-purchase transaction or any system of payment by installments;

     (e) amount, allowed as cash discount and trade discount, provided such discount is in accordance with the regular trade practice;

     (f) sale price of taxable goods where such sale was cancelled:

         Provided that the deduction shall be claimed only, if the person is in possession of all copies of VAT invoice or Retail invoice.

     (g) sale price, in respect of any goods , returned within a period of six months:

 

         Provided that a taxable person shall claim the deduction only on the basis of debit note, issued by the purchaser for the goods returned; and

     (h) a sum, to be calculated  by applying a tax fraction in case,  gross turnover includes retail sales.

 

(2) The deduction referred to in clauses  (e), (f) and (g) of sub-rule (1), shall be claimed in the tax period in which the event occurs: 
   Provided that if the turnover of the period is less than the claim, then the balance of such deduction, shall be claimed in the immediate subsequent period.  

(3) The provisions of clauses (a) to (g) of sub-rule (1), shall also apply for determination of taxable turnover of purchases for levy of purchase tax under sections 19 and 20 of the Act.

 

(4) The value of the goods, involved in the execution of a works contract, shall be determined by taking into  account the value of the entire works contract by deducting there-from  the components of payment, made towards labour and services, including -

 

    (a) labour  charges for execution of the works;

    (b) amount paid to a sub-contractor for labour and services;

    (c) charges for planning, designing and architect’s fees;

    (d) charges for obtaining for hire, machinery and tools used for the execution of the works contract;

    (e) cost of consumables, such as, water, electricity and fuel,  used in the execution of the works contract, the property, which is not transferred in the course of execution of a works contract;

    (f)   cost of establishment of the contractor to  the extent, it is relatable to the supply of labour and services;

    (g)  other similar expenses relatable to supply of labour and services and;

    (h)    profit earned by the contractor to the extent, it is relatable to the supply of labour and services.  

 

(5)   The amounts deductible under sub clauses (c) to (h) of sub rule (4), shall be determined in the light of the facts of a particular case on the basis of the material produced by the contractor.

(6) Where the contractor has not maintained the accounts to determine the correct value of the goods at the time of incorporation or deductions being claimed under sub-rule (4) are considered to be unreasonably high in view of the nature of contract, he shall pay tax at the rate of tweleve and a half percent on the total consideration received or receivable, subject to the deductions specified in the table below.In such cases the contractor shall not be eligible to claim input tax credit and shall not be eligible to issue VAT Invoice:-