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Thread: Meaning of Incidence of tax in Madhya Pradesh Value Added Tax (MPVAT)

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    Default Meaning of Incidence of tax in Madhya Pradesh Value Added Tax (MPVAT)

    Meaning of Incidence of tax in Madhya Pradesh Value Added Tax (MPVAT)

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    Default Role of Incidence of tax in Madhya Pradesh VAT

    Role of Incidence of tax in Madhya Pradesh VAT

    5 : Incidence of tax.

    (1) Every dealer whose turnover during a period of twelve months immediately preceding the commencement of this Act exceeds the prescribed limits, which shall not exceed rupees five lacs, shall from such commencement be liable to pay tax under this Act in respect of sales or supplies of goods effected by him in Madhya Pradesh. Different limits may be prescribed for different category of dealers.

    (2) Every dealer to whom sub-section (1) does not apply shall be liable to pay tax under this Act in respect of sales or supplies of goods effected by him in Madhya Pradesh with effect from the date on which his turnover in a year first exceeds the limit prescribed under the said sub-section but for the purpose of assessment of the tax for that year, only so much of his turnover as is in excess of such limit, shall be taken into consideration.

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    Default Meaning of Determination of liability to pay tax in Madhya Pradesh VAT

    Meaning of Determination of liability to pay tax in Madhya Pradesh VAT

    6 : Determination of liability to pay tax

    (1) The Commissioner shall, in the prescribed manner, institute proceedings for the purpose of determining the liability of a dealer to pay tax under this Act. Such liability shall be determined by an order and such determination shall be made within a period of twelve months from the date of institution of such proceedings.

    (2) Notwithstanding anything contained in sub-section (2) of Section 5, liability of a dealer to pay tax under this Act shall not be determined from a date earlier than five years prior to -
    (i)the date of institution of proceedings under sub-section (1); or
    (ii) the date of validity of the registration certificate, whichever is earlier.

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    Default Meaning of Joint and several liability of certain class of dealers in Madhya Pradesh VAT

    Meaning of Joint and several liability of certain class of dealers in Madhya Pradesh VAT

    7 : Joint and several liability of certain class of dealers.

    (1)(a) Where a dealer who carries on the business of supplying goods in the course of execution of a works contract entered into by him (hereinafter referred to as a contractor) through another such dealer (hereinafter referred to as a sub-contractor) directly or otherwise, and the sub-contractor executes such works contract and each or either of them is liable to pay tax under this Act, then notwithstanding anything contained in this Act, the contractor and the sub-contractor shall be jointly and severally liable to pay tax in respect of transfer of property in goods whether as goods or in some other form involved in the execution of such works contract.
    (b) If the contractor proves in the prescribed manner to the satisfaction of the Commissioner that the tax has been paid by the sub-contractor on the turnover of the goods supplied in the course of execution of the works contract, the contractor shall not be liable to pay tax again on the turnover of such goods.
    (c) If the sub-contractor proves in the prescribed manner to the satisfaction of the Commissioner that the contractor has opted for composition under section 11-A in respect of the works contract being executed by the sub-contractor, the sub-contractor shall not be liable to pay tax on the turnover of the goods supplied in the execution of the works contract. 6

    (2) Omitted

    (3) Where any dealer or person with a view to evade payment of tax or in order to claim any input tax rebate which he otherwise is not eligible for or was carrying on business in the name of or in association with any other person either directly or indirectly, whether as an agent, employee, manager, partner or power of attorney holder, guarantor, relative or sister concern or any other capacity, such person and the dealer in whose name the registration certificate was obtained shall jointly and severally be liable for the payment of tax assessed, reassessed, interest payable and penalty imposed under the Act and such tax, interest and penalty shall be recovered from all or any of such persons as if such person or persons are dealer under the Act.

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    Default Meaning of Liability of a dealer registered under Central Act No. 74 of 1956 to pay tax in Madhya Pradesh VAT

    Meaning of Liability of a dealer registered under Central Act No. 74 of 1956 to pay tax in Madhya Pradesh VAT

    8 : Liability of a dealer registered under Central Act No. 74 of 1956 to pay tax

    (1) A dealer registered under the Central Sales Tax Act, 1956 (No.74 of 1956) who is not liable to pay tax under Section 5 shall nevertheless be liable to pay tax at the rate specified in section 9 on his sales of any goods in respect of the purchases of which he has furnished a declaration under sub-section (4) of Section 8 of the said Act or on the sales of any goods in the manufacture of which such goods have been used,

    (2) Every dealer to whom sub-section (1) applies shall for the purposes of Section 18, 20, 24 and 39 be deemed to be a registered dealer.

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    Default Meaning of Levy of tax in Madhya Pradesh Value Added Tax (MPVAT)

    Meaning of Levy of tax in Madhya Pradesh Value Added Tax (MPVAT)

    9 : Levy of tax

    (1) There shall be levied on goods specified in Schedule II, a tax at the rate mentioned in the corresponding entry in column (3) thereof and such tax shall be levied on the taxable turnover of a dealer liable to pay tax under this Act.2

    (2) Notwithstanding anything contained in this Act, no tax shall be levied on goods specified in Schedule II, if the goods are sold by any one of the public sector oil companies, that is Indian Oil Corporation Limited, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited and Indo-Burma Petroleum Company Limited, to any one of the said oil companies.

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    Default Meaning of Levy of Purchase tax in Madhya Pradesh Value Added Tax (MPVAT)

    Meaning of Levy of Purchase tax in Madhya Pradesh Value Added Tax (MPVAT)

    10: Levy of Purchase tax

    (1) Every dealer who in the course of his business purchases any goods specified in Schedule II from any person other than a registered dealer or from a registered dealer who has opted for composition of tax under section 11, shall be liable to pay tax on the purchase price of such goods if after their purchase, -

    (a) the goods other than those specified in part III of the said Schedule, are not sold within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise; or
    (b) the goods other than those specified in part III of the said Schedule, are consumed or used,-
    (i) in the manufacture or processing of goods declared tax free under section 16 and the manufactured or processed goods are disposed of otherwise than by way of sale in the course of export out of the territory of India; or
    (ii) as plant, machinery, equipment and parts thereof in generation, transmission or distribution of electrical energy ; or
    (c) the goods other than those specified in part III of the said Schedule, after consumption or use in the manufacture or processing or mining of any goods specified in Schedule II, the manufactured or processed or mined goods are disposed off otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India ; or
    (d) the goods specified in part III of the said Schedule, are not sold within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise; or
    (e) the goods specified in part III of the said Schedule, are consumed or used in the manufacture or processing or mining of goods ;
    and such tax shall be levied, -
    (i) in respect of goods referred to in clauses (a), (b) and (c), at the rate of 4 percent or the rate specified in column (3) of Schedule II, whichever is lower; and
    (ii) in respect of goods referred to in clauses (d) and (e),at the rate specified in column (3) of Schedule II.

    Explanation - The rate specified in Schedule II shall be the rate at which tax would have been levied on the sales of such goods within the State of Madhya Pradesh on the date of such purchase.

    (2) No tax under this section shall be levied in respect of any year on -
    (a) a dealer whose turnover in a year does not exceed the limit prescribed under sub-section (1) of section 5,
    (b) any other dealer who has no turnover, if his aggregate of purchase prices of all the goods does not exceed such amount as may be prescribed.

    (3) Every dealer who has no turnover and is liable to pay tax under sub-section (1) shall, for the purpose of Sections 18,20,21, 24,25 and 39, be deemed to be a registered dealer

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    Default Meaning of Composition of tax in Madhya Pradesh VAT

    Meaning of Composition of tax in Madhya Pradesh VAT

    11. Composition of tax

    (1) A registered dealer purchasing goods specified in Schedule II from another such dealer within the State after payment to him of tax under section 9 and/or purchasing goods specified in Schedule I, and whose turnover in a year does not ordinarily exceed such limit as may be prescribed but does not exceed fifty lacs, may opt, in the prescribed form within one month of the commencement of such year, for payment, in lieu of tax payable by him under section 9, a lump sum at such rate not exceeding four percent in such manner and subject to such restrictions and conditions as may be prescribed .

    Provided that in case of a dealer who is a manufacturer, the condition of purchases from a registered dealer shall be limited to the goods specified in part-III and IV of Schedule II.

    Provided further that the option for composition pertaining to the year 2006-07 can be given up-to 30th June, 2006;

    Provided also that a dealer who has obtained registration certificate during a year, may give option for composition for the part period of the year and the option for composition can be given within 30 days from the date of registration.

    (2) If a registered dealer during the year for which an option has been given by him, contravenes any of the restrictions and conditions prescribed under sub-section (1), the option given by him shall stand revoked.

    (3) A registered dealer who opts for composition of tax under sub-section (1) shall not be eligible to any input tax rebate in respect of the goods sold during the year in relation to which such option is exercised by the dealer and the input tax rebate already claimed and adjusted towards the tax payable, shall be paid along with the first quarter of the year.

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    Default Composition of tax by certain registered dealers in Madhya Pradesh VAT

    Composition of tax by certain registered dealers in Madhya Pradesh VAT

    11A. Composition of tax by certain registered dealers
    (1)(a) The Commissioner may, subject to such restrictions and conditions as may be prescribed, permit any registered dealer, who carries on wholly or partly the business of supplying goods in the course of execution of works contract entered into by him, to pay in lieu of tax payable by him under this Act a lump sum at such rate as may be prescribed and determined in the prescribed manner, by way of composition, and this option for composition will have to be submitted within 30 days of commencement of execution of the works contract or contract.
    (b) The provisions of Sections 18, 20, 20 A, 39 and 40 shall not apply to a registered dealer to whom permission to pay a lump sum by way of composition is granted under clause (a) in relation to the period for and the goods in respect of which such composition of tax has been made and who complies with the restrictions and conditions prescribed under the said clause.

    (2) For the purpose of determination of the lump sum by way of composition under clause (a) of sub-section (1), the State Government may prescribe different rates for different kinds of contracts.

    (3) A registered dealer who opts for composition of tax under sub-section (1) shall not be eligible to any input tax rebate in relation to the period for and the goods in respect of which such option is exercised by the dealer.

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    Default Payment of lump sum in lieu of tax in Madhya Pradesh VAT

    Payment of lump sum in lieu of tax in Madhya Pradesh VAT

    11-B : Payment of lump sum in lieu of tax

    (1) Notwithstanding anything contained in this Act, the State Government may direct payment of tax in lump sump in respect of such class of goods by such class of dealers on such terms and conditions as may be notified in the official Gazette.

    (2) The tax in lump sump specified in sub-section (1) shall not exceed the amount of maximum tax liability provided in sub-section (1) of section 9.

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