Section 3. Incidence of tax
(1) Subject to the provisions of this Act, every dealer,-
(i) whose total turnover during the year immediately preceding the appointed day exceeded rupees five lakhs and whose taxable turnover exceeded rupees ten thousand in a year (the aforesaid amounts of total turnover and taxable turnover are hereinafter referred to as “thresholds of turnover”), or
(ii) who was registered under the earlier law or under the Central Act as on the appointed day, or
(iii) whose total turnover and taxable turnover in any year first exceed the thresholds of turnover, or
(iv) who is registered or liable to be registered as a dealer under this Act or under the Central Act at any time after the appointed day
shall be liable to pay tax in accordance with the provisions of this Act
(2) Notwithstanding anything contained in this section, a casual dealer or an auctioneer shall be liable to be registered if his taxable turnover of sales exceeds ten thousand rupees and he shall be liable to pay tax in accordance with the provisions of this Act.
(3) The dealer shall be liable to pay tax,--
(a) in case of clauses (i) and (ii) of sub-section (1), with effect from the appointed day
(b) in case of clause (iii) of sub-section (1), with immediate effect when his turnover calculated from the commencement of the year first exceeds the thresholds of turnover;
(c) in case of clause (iv) of sub-section (1), with immediate effect when he becomes so liable or the date of registration under this Act, whichever is earlier:
Provided that the dealer shall not be liable to pay tax in respect of thresholds of turnover as takes place during the period prior to the relevant date of effect under this sub-section.
(4) Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry of one year during which his turnover has remained below the thresholds of turnover.
Provided that any dealer whose liability to pay tax under this Act ceases or his total turnover and taxable turnover during the year remains below the thresholds of turnover, may apply for the cancellation of his certificate of registration; and on such cancellation, his liability to pay tax shall Incidence of tax. 11 cease and such dealer shall remain liable to pay tax till his certificate of registration is cancelled.
(5) Every dealer whose liability to pay tax under this Act has ceased under sub-section (4) or whose certificate of registration has been cancelled, shall, if his total turnover of sales or purchases calculated from the commencement of any year (including the year in which the registration has been cancelled) again exceeds the thresholds of turnover, on any day within such year, be liable to pay tax with effect from the date immediately following the day on which his total turnover again exceeds thresholds of turnover of sales effected by him after that date
(6) Where by an order passed under this Act, it is found that any person registered as a dealer ought not to have been so registered, then, notwithstanding anything contained in this Act, such person shall be liable to pay tax for the period commencing with the date of his registration and ending with the date of such order, as if he were a dealer. |