(1) Subject to the provisions of this Act, there shall be levied a tax, --
(a) at every point of sale in respect of the goods specified in the second column of Schedule ‗A‘,
(b) at the prescribed points of purchase in respect of goods specified in the second column of Schedule ‗C‘, and
(c) at the first point of sale in respect of the goods specified in the second column of Schedule 1 Substituted for the words, figures & signs 6,00,000/- to 8,00,000 by Act No. 2 of 2013 vide notification No. LLR-D(6)-35/2012-LEG dated 05-01-2013 published in Rajpatra, Himachal Pradesh on 15-01-2013.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 17 74 of 1956 ‗D‘,
(d) 1 at every point of sale in respect of the goods specified in the second column of Schedule ‗E‘, on the taxable turnover of a dealer, at the rates as specified in the respective Schedules or at such rates not exceeding 100 paise in a rupee as the State Government may, by notification, direct:
Provided that the State Government may notify different rates in respect of different goods or classes of goods:
Provided further that the rate of tax in respect of declared goods shall not exceed the maximum rate of tax specified in clause (a) of section 15 of the Central Sales Tax Act, 1956:
Provided further that subject to furnishing of a declaration as may be prescribed, the Government may, by notification, reduce the rate of tax levied under sub-section
(1) upto 4% in respect of goods sold to the Government, not being a registered dealer, for captive use in telecommunication network, or in the generation or distribution of electricity or any other form of power.
(2) Notwithstanding anything contained in this section, where any goods are sold in container or are packed in any packing material, the rate of tax applicable to such container or packing material, shall, whether the price of the container or 1 Clouse (d) inserted vide notification No LLR-d(6)-7/2011-Loos dated 6-05-2011 Published in RHP (Extra-ordinary) on 07-05-2011.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 18 packing material is charged separately or not, be the same as is applicable to the goods, contained or packed therein and the turnover in respect of the container and packing material, shall be included in the turnover of such goods. Where the goods, sold in container or packed in packing material are tax free, the sale of such container or packing material shall also be tax free.
(3) In this Act, the expression ―taxable turnover‖ means that part of the dealer‘s gross turnover during any period which remains after deducting therefrom ---
(a) his turnover during that period on---
(i) the sale of goods declared tax free under section 9;
(ii) sale or purchase of goods falling under section 58; and
(iii) such other sales or purchases as may be prescribed; and
(b) the amount of tax included in the gross turnover.
Levy of presumptive tax.
7. Notwithstanding anything contained in this Act, every registered dealer, whose gross turnover in any year does not exceed such amount as may be prescribed, shall, in lieu of the tax payable under this Act, pay presumptive tax on the entire taxable turnover of sales or purchases, as the case may be, at such rates, not exceeding the rates specified in section 6, as the State Government may, by notification, direct, and subject to such conditions and restrictions and in such manner as may be prescribed:
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 19
Provided that no input tax credit shall be available to such dealer:
1 ―Provided further that a registered dealer who imports goods for sale shall pay tax on the sale of such goods imported from outside the State on actual basis i.e. as per tax applicable on the sale of such goods within the State.‖ Levy of purchase tax on certain goods in certain circumstances.
8. Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule ‗B‘ from any source, and --
(a) uses them within the State in the manufacture of goods specified in Schedule ‗B‘, or
(b) uses them within the State in the manufacture of any goods, other than those specified in Schedule ‗B‘, and sends the goods so manufactured outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, or
(c) uses such goods for a purpose other than that of resale within the State or sale in the 1 Substituted by Act No. 13 of 2015 vide notification No. L.L.R.-D(6)-6/2015-LEG. Dated 10.5.2015 published in R.H.P. on 18.5.2015. Prior to substituted by Act No. 14 of 2009 vide notification No. LLR-D (6)-20/2009-Leg. Dated
19.9.2009 published in R.H.P. (Extra-ordinary) on 22.9.2009 entry was as under:- ―Provided further that no registered dealer, except a brick-kiln owner, who imports goods for sale or use in manufacturing or processing any goods for sale, shall be entitled to make payment of presumptive tax under this section.‖ THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 20 course of inter-State trade or commerce or in the course of export out of the territory of India, or
(d) sends them outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, and no tax is payable on the purchase of such goods under any other provisions of this Act, there shall be levied a tax on the purchase of such goods equal to the rate as notified, under sub-section (1) of section 6, by the State Government.
Tax free Goods.
9. No tax shall be payable on the sale of goods specified in the second column of Schedule ‗B‘, subject to the conditions and exceptions, if any, set out in the corresponding entry in the third column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax free from time to time under this section.
Power to amend Schedules.
10. The State Government, after giving by notification, not less than [ 1 ten days‘] notice of its intention to do so, may, by like notification, add to or delete from the Schedules ‗A‘, ‗B‘, ‗C‘ , ‗D‘ 2 or ‗E‘ any goods, or otherwise amend these 1 Substituted by Act No. 14 of 2009 vide notification No. LLR-D (6)-20/2009-Leg. dated 19.9.2009 published in R.H.P. (Extra-ordinary) on 22.9.2009. prior substitution the words were ‗thirty days‖.
2 The word, letter and signs ―or ‗D‘‖, the signs, word and letters ―,‘D‘ or ‗E‘‖ shall be substituted vide Notification No. LLR-d(6)-7/2011-Loos dated 6-05-2011 Published in RHP (Extra-ordinary) on 07-05-
2011.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 21 Schedules, and thereupon the Schedule shall be deemed to have been amended accordingly.
Input tax credit.
11.
1 [(1) Subject to the provisions of this Act, the input tax credit which a purchasing registered dealer (hereinafter in this section called ‗the purchasing dealer‘) may claim, in respect of taxable sales made by him during the tax period, shall be –
(i) the amount of input tax paid or payable by such purchasing dealer to the selling registered dealer, on the turnover of purchases of such goods as have been sold by him during the tax period; and
(ii) calculated and allowed as provided in this section, and subject to such other conditions as may be prescribed.]
(2) The purchasing dealer availing of the input tax credit shall maintain the tax invoices, the registers and the books of accounts in the manner as may be prescribed.
(3) 2 [Except the goods in respect of which input tax credit is not admissible under this Act or the rules made thereunder, the input tax credit shall be allowed to the purchasing dealer in respect of the turnover of purchases of such taxable goods as have been sold by him during the tax period, and to the extent 1 Substituted for the word, letter and signs ―or ‗D‘‖, the signs, word and letters ―,‘D‘ or ‗E‘‖ shall be substituted by Act No. 12 of 2007 published vide Notification No. LLR-D(6) 4/2007 –Leg. Dated 16-5-2007 published in R.H.P. dated 16-5-2007. Sub-section (1) prior substitution was as under :-- ―The input tax credit which a purchasing registered dealer (hereinafter in this section called ‗the purchasing dealer‘), is entitled to claim, shall be the amount of input tax paid or payable by such purchasing dealer to the selling registered dealer, on the turnover of purchases made by him during the tax period and input tax credit shall be calculated as provided in this section and allowed subject to such conditions as may be prescribed.‖ .
2 Substituted by Act No. 12 of 2007 published vide Notification No. LLR-D(6) 4/2007-Leg. dated 16- 5-2007 in R.H.P. Extra dated 16-5-2007. The words and signs prior to substitution were: ―The input tax credit shall be allowed to the extent of the amount of input tax paid by the purchasing dealer on the purchases of taxable goods made by him in the State, from a registered dealer holding a valid certificate of registration, which are intended for the purpose of,-‖ THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 22 of the amount of input tax paid by such purchasing dealer on the turnover of purchases of such taxable goods made by him in the State, from a registered dealer holding a valid certificate of registration, for the purposes of,--]
(a) sale or re-sale of goods by him in the State; or
(b) sale in the course of inter-State trade or commerce;
or
(c) sale in the course of export out of the territory of India; or
(d) use as raw material or as capital goods in the manufacturing or processing of taxable goods for sale of the nature referred to in clauses (a), (b) or (c);
or
(e) use as containers or packing material of taxable goods for sale of the nature referred to in clauses (a),
(b), (c) or (d):
Provided that if the goods so purchased are used partially for the purposes specified in this sub-section, the input tax credit shall be allowed proportionate to the extent these are used for the purposes specified in this sub-section:
Provided further that input tax credit on fuels and lubricants, shall be allowed only to the extent by which the amount of input tax paid in the State exceeds 4 percent subject to the condition that such fuels and lubricants are used in the manufacture of taxable goods or captive generation of power.
(4) Notwithstanding anything contained in sub-section
(3), the input tax credit shall be allowed only to the extent by which the amount of input tax paid in the State exceeds 4 percent on purchase of goods—
(a) sent outside the State otherwise than by way of sale in the course of inter-State trade or commerce or in the course of export out of territory of India; and
(b) used in manufacture or in packing of taxable goods sent outside the State otherwise [ 1 than] by way of sale in the course of inter-State trade or commerce or in THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 23 the course of export out of territory of India.
(5) The input tax credit shall not be claimed by the purchasing dealer until the tax period in which he receives from a registered dealer from whom he has purchased the goods, a tax invoice in the prescribed form (in original) evidencing the payment of amount of input tax:
2 XX XX XX XX XX .
___________________________________________________________ 1 Inserted by Act No.- of 14 of 2009 vide . notification No. . LLR-D (6)-20/2009-Leg. Dated 19.9.2009 published in R.H.P. (Extra-ordinary) on 22.9.2009.
2.
.
Omitted by Act No.14 of 2009 vide notification No. LLR-D (6)-20/2009-Leg. Dated 19.9.2009 published in R.H.P. (Extra-ordinary) on 22.9.2009. Provisions prior to this amendment were as under:- ―Provided that for good and sufficient reasons, to be recorded in writing and in the prescribed manner, the Commissioner or any person appointed under section 3 may allow such credit subject to such conditions and restrictions as may be prescribed.‖
(6) The input tax credit on capital goods shall be limited to plant and machinery directly connected with the manufacturing or processing of the finished goods and input tax credit as admissible under this section shall commence from the date of commencement of commercial production and shall be adjusted against tax payable on turnover of sales over a period of three years:
Provided that in case of closure of business before the period of three years, no further input tax credit shall be allowed and input tax carried forward, if any, shall be forfeited.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 24
(7) No input tax credit shall be claimed by a purchasing dealer and shall not be allowed to him for, ---
(a) tax collected on the purchase of goods used in the manufacture or processing or packing of goods declared tax free under section 9;
(b) purchases of goods made in the course of inter-State trade or commerce or in the course of import of goods into the territory of India or import from outside the State, in respect of tax paid in any other country or other State;
(c) purchase of goods made in the State from,--
(i) an un-registered dealer or a casual dealer, or
(ii) a dealer whose certificate of registration has been suspended, or
(iii) a registered dealer who has opted to pay lump-sum amount, in lieu of tax, by way of composition under sub-section (2) of or presumptive tax under section 7;
(d) purchase of goods used as free samples or gift or for personal consumption;
(e) goods purchased for the uses specified in sub-section
(3) but not sold because of theft, loss or destruction for any reason including natural calamity;
(f) purchase of capital goods other than those specified in sub-section (6);
(g) stock of goods remaining unsold at the time of closure of business and if a dealer has already taken any input tax credit against purchase of such stock of goods there shall be a reverse tax credit on closure of such THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 25 business;
(h) save as provided in sub-section (4), tax collected on purchase of goods but subsequently despatched to a place outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce;
(i) save as provided in sub-section (4), tax collected on the purchase of goods used as raw material in the manufacture of goods, and the goods so manufactured are despatched outside the State in any manner otherwise than by way of sale in the course of inter-State trade or commerce;
(j) purchase of goods for sale under the transfer of right to use goods for any purpose (whether for specified period or not);
(k) purchases where,--
(i) tax invoice is not available with the registered dealer; or
(ii) there is evidence that the tax invoice has not been issued by the selling dealer from whom the goods have been or stated to have been purchased; or
(iii) original tax invoice does not contain the details of tax charged separately by the selling dealer from whom purchasing dealer has purchased the goods 1 [; and 1 The sign ―.‖,substituted by the sign and the word ―; and‖ and thereafter the new clause (l) inserted by Act No. 12 of 2007 published vide Notification No. LLR-D (6)4/2007-Leg. dated 16-5-2007 in R.H.P.
Extra dated 16-5-2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 26
(l) the turnover of purchase of such goods which have not been sold during the tax period.]
(8) Notwithstanding anything contained in this Act, the State Government may, as may be prescribed, specify any goods in respect of which input tax credit shall not be allowed in part or in full or specify the class of dealers who shall not be entitled to input tax credit in part or in full.
(9) If the goods purchased 1 [xxx] for the purposes specified in sub-section (3) and are subsequently used fully or partly for purposes other than those specified in the said sub-section, the input tax credit, if availed of, shall be reduced from the input tax credit being claimed for the tax period during which such use has taken place; and such reduction, shall be done in the manner as may be prescribed.
(10) Subject to the provisions of this section, input tax credit already availed of shall stand reversed if, --
(a) the dealer discontinues business; or
(b) the certificate of registration granted to the dealer is cancelled; or
(c) the goods fall under clause (d), (e) or (g) of subsection (7); or
(d) excess input tax credit has been claimed; or
(e) the goods purchased are returned to the selling dealer within three months of the date of purchase of such goods; or 1 The words ―are intended‖ omitted by Act No. 12 of 2007 published, vide Notification No. LLR-D
(6)4/2007-Leg. dated 16-5-2007, in R.H.P. Extra dated 16-5-2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 27
(f) the credit note has been received from selling registered dealer for the amount of tax charged in excess of the tax due according to the provisions of this Act; or
(g) there exist any other circumstances as may be prescribed.
(11) The dealer shall be liable to pay such amount of reverse input-tax credit alongwith interest under section 19 from the date immediately succeeding the last date prescribed for filing the return for the period for which such input-tax credit was claimed till the date of its payment.
(12) Where any purchasing dealer has been issued with a credit note or debit note or if he returns or rejects goods purchased, as a consequence of which the input tax credit availed of by him during any tax period (to which the purchase of goods relates) becomes either short or excess, he shall compensate such short or excess by adjusting the amount of input tax credit allowed to him in respect of the tax period in which the credit note or debit note has been issued or the goods are returned or rejected, subject to such conditions as may be prescribed.
(13) The amount of net input tax credit, which may be availed of by a purchasing dealer, shall be determined on the basis of the following formula, namely: - Net Input Tax Credit = A+B-C
Explanation--- In this formula----
(i) ―A‖ represents the amount of input tax credit THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 28 1 [which the purchasing dealer may be allowed under this section in respect of taxable sales made by him during the tax period];
(ii) ―B‖ represents outstanding input tax credit brought forward from the previous tax period; and
(iii) ―C‖ represents reverse input tax credit as determined under sub-section (10).
(14) The methods that are used by a purchasing dealer in a year to determine the extent to which the goods are sold, used, consumed or supplied, or intended to be sold, used, consumed or supplied in the course of making taxable sales shall be fair and reasonable:
Provided that the Commissioner or any person appointed under section 3 may, after giving the dealer an opportunity of being heard and for the reasons to be recorded in writing, reject the method adopted by the purchasing dealer and calculate the amount of input tax credit.
(15) Where a registered dealer without entering into a transaction of sale, issues to another registered dealer a tax invoice, retail invoice, bill or cash memorandum with the intention to defraud the State Government revenue or with the intention that the State Government may be defrauded of its revenue, the Commissioner or any person appointed under section 3 may, after making such inquiry as he thinks fit and giving a reasonable opportunity of being heard, deny the 1 The words ―for which the purchasing dealer is entitled to ‖, substituted by Act No. 12 of 2007 published vide Notification No. LLR-D (6)4/2007-Leg. dated 16-5-2007 in R.H.P. Extra dated 16-5-
2007.
THE HIMACHAL PRADESH VALUE ADDED TAX ACT, 2005 29 benefit of input tax credit to such registered dealer issuing or accepting such tax invoice, retail invoice, bill or cash memorandum or other invoice either prospectively or retrospectively from such date as he may fix.
1
(16) If a dealer, —
(a) falsely claims Input Tax Credit in his returns to which he is not entitled, the Commissioner or the Assessing Authority shall direct such dealer to pay, by way of penalty, in addition to the tax and interest payable by him, a sum equal to 2 [xxx] the amount of such claim or credit; and
(b) claims incorrect Input Tax Credit in his returns, the Commissioner or the Assessing Authority shall direct such dealer to pay, by way of penalty, in addition to the tax and interest payable by him, a sum equal to 3 ―twenty five‖ percentum of the amount of such claim or credit.
Explanation: — (i) For the purpose of clause (a) ―falsely‖ means excessive claim made deliberately with the intent to affect revenue interest adversely; and
(ii) For the purpose of clause (b) ―incorrect‖ means excessive claim due to wrong calculation without any intension to affect revenue interest adversely.
Net tax payable.