The Karnataka Sales Tax Rules,1957.

THE KARNATAKA SALES TAX RULES, 1957 =================================================== CONTENTS Rules

PART I

1. Title

2. Commencement

3. Definitions 3(a) The Act 3(b) Fees 3(c) Form 3(d) Government Treasury 3(e) Omitted 3(f) Omitted 3(g) Omitted 3(h) Registering Authority 3(i) Schedule 3(j) Section

PART II Turnover and Assessment

4. Registering Authority

5. Assessing Authority

6. Determination of total and taxable turnover 6-A. Provision relating to decalration under Section 6-A 6-B. Declaration to be obtained in respect of branded goods

7. Returns to be submitted by the Head Office

8. Composition of tax 8-A. Composition of tax in the case of jaggery manufactures using power crushers [Omitted] 8-B. Composition of tax in the case of dealers executing work contracts Rules 8-C. Composition of tax in the case of dealers producing granite metal by using stone crushing machinery 8-D. Composition of tax in the case of dealer selling lottery tickets

9. Registration of dealers 9-A. Suo motu Registration

10. Amendment of Registration Certificate

11. Issue of duplicate Registration Certificate

12. Collection of taxes by dealers 12-A. Security to be furnished by certain dealers

13. Form of return 13-A. Statement to be submitted by authorities deducting tax at source

14. Omitted

15. Omitted

16. Omitted

17. Payment of tax in advance, reimbursement of excess tax paid on industrial inputs, etc., 17-A. Return and Assessment of certain casual traders

18. Annual return and final assessment 18-A. Assessment of certain persons 18-AA. Consent for summary assessment 18-B. Submission of return by Government Department etc.

19. (Omitted)

20. Adjustment after final assessment 20-A. For grant of permission to pay finally assessed tax in instalments 20-B. Disbursement of amount wrongly collected as tax 20-C. Procedure and conditions for granting deferred payment of tax or exemption of tax for new industry

21. Submission of Quarterly Returns (Omitted)

22. Determination of turnover 22-A. Assessment of body corporate under Section 12-E

23. Return when goods are liable to different rates of tax (Omitted) 23-A. Exemption from submission of returns

PART II-A Checkposts Rules

23.B. Particulars of bill of sale 23-BB. Permit for move Coffee Seeds [Omitted] 23-C. Declaration under Section 28-A(2) 23-D. Inspection, etc., of goods at checkposts and barriers 23-E. Inspection, etc., at places other than checkposts and barriers

23F. The transit of goods by road through the State and issue of transit pass 23-G. Remittance of sale proceeds 23-H. Notice of penalty under Section 28(3-A)

PART III Licences and Certificates of Recognition

24. The village industries for the purpose of Serial Number 42-A of the Fifth Schedule

25. Certificate of recognition 25-A. The village industries for the purpose of Serial Number 28 of the Fifth Schedule [Omitted] 25-B. Certificate of recognition [Omitted]

PART IV Accounts

26. Nature of accounts to be maintained by dealers and licensees 26-A. Notice to produce accounts, etc

27. Delivery Notes to accompany certain consignments 27-A. Particulars to be shown in the Bill or Cash Memorandum 27-B. Certificate for deduction of tax at source 27-C. Clearance Certificate to registered dealers

PART IV-A Clarification and Advance Rulings Rules 27-D. Definitions 27-E. Application for Clarification and Advance Rulings 27-F. Constitution of the Authority 27-G. Sittings of the Authority 27-H. Powers of the Authority 27-I. Powers and functions of the Secretary 27-J. Signing of Notices, etc 27-K. Submission of additional facts before the Authority 27-L. Questions contained in the application 27-M. Authorisation to be filed.

27-N. Continuation of proceedings after the death, etc., of the applicant 27-O. Hearing of application ex parte 27-P. Modification of the Order 27-Q. Rectification of mistakes 27-R. Amendment of the record 27-S. Inspection of records and fees thereof 27-T. Proceedings open to the public 27-U. Publication of orders 27-V. Authentication and communication of orders 27-W. Proceedings of the Authority 27-X. Procedure in case of other application

PART V Appeals and Revisions

28. Appeal against original orders of Assessing Authority

29. Omitted

30. Appeal to Appellate Tribunal 30-A. Procedure in case of death of an appellant or an applicant 30-B. Furnishing of Security Rules

31. Revision Petition to High Court

32. Appeal to High Court

33. Determination of correct assessment by Appellate or Revisional Authority

34. Communication of Appellate or Revisional Orders

35. Procedure when higher assessment is made in appeal or revision

36. Action on the orders of the Appellate Tribunal and the High Court

37. Assessment of escaped turnover

38. Rectification of mistake (Omitted)

PART V-A Reduction in rates of tax and waiver of penalty 38-A. Documents and accounts to be maintained by dealers under Section 5-A 38-B. Conditions for remission of penalty

PART V-B Procedure for Recovery of Tax General Provisions 38-C. Definitions 38-D. Issue of certificate 38-E. Issue of notice 38-F. When certificate may be executed 38-G. Mode of recovery 38-H. Interest, costs and charges recoverable 38-I. Purchaser’s title 38-J. Suit against purchaser not maintainable on ground of purchase being made on behalf of plaintiff 38-K. Disposal of proceeds of executions 38-L. General bar to jurisdiction of Civil Courts, save where fraud alleged Rules 38-M. Property exempt from attachment 38-N. Investigation by Tax Recovery Officer 38-P. Removal of attachment or distraint on satisfaction or cancellation of certificate 38-Q. Officer entitled to attach, distraint and sell 38-R. Defaulting purchaser answerable for loss on resale 38-S. Adjournment or stoppage of sale 38-T. Private alienation to be void in certain cases 38-U. Prohibition against bidding or purchase by officer 38-V. Prohibition against sale on holidays 38-W. Assistance by police Attachment or distraint and sale of movable property 38-X. Warrant 38-Y. Attachment 38-Z. Property in defaulter’s possession 38-AA. Agricultural produce 38-AB. Provisions as to agricultural produce under attachement 38-AC. Debts and Shares, etc., 38-AD. Attachment of decress 38-AE. Share in movable property 38-AF. Attachment of negotiable instrument 38-AG. Attachment of property in custody of Courts or Public Officer 38-AH. Attachment of partnership property 38-AI. Value of property 38-AJ. Inventory 38-AK. Seizure between sun-rise and sun-set 38-AL. Power to break open door, etc 38-AM. Sale 38-AN. Issue of proclamation 38-AP. Proclamation how made 38-AQ. Sale after fifteen days Rules 38-AR. Sale of agricultural produce 38-AS. Special provisions relating to growing crops 38-AT. Sale to be by auction 38-AU. Sale by public auction 38-AV. Irregularity not to vitiate sale, but any person injured may sue 38-AW. Negotiable instruments and shares in a corporation 38-AX. Order for payment of coin or currency notes to the Tax Recovery Officer Attachment and sale of immovable property 38-AY. Attachment 38-AZ. Service of notice of attachment 38-BA. Proclamation of attachment 38-BB. Attachment to relate back from the date of service of notice 38-BC. Sale and proclamation of sale 38-BD. Contents of proclamation 38-BE. Mode of making proclamation 38-BF. Time of sale 38-BG. Sale to be by auction 38-BH. Deposit by purchaser and re-sale in default 38-BI. Procedure in default of payment 38-BJ. Authority to bid 38-BK. Application to set aside sale of immovable property on deposit 38-BL. Application to set aside sale of immovable property on ground of non-service of notice or irregularity 38-BM. Setting aside sale where defaulter has no saleable interest 38-BN. Confirmation of sale 38-BO. Return of purchase money in certain cases 38-BP. Sale Certificate 38-BQ. Postponement of sale to enable defaulter to raise amount due under certificate 38-BR. Fresh proclamation before re-sale Rules 38-BS. Bid of co-sharer to have preference 38-BT. Power to take evidence 38-BU. Appeals 38-BV. Review 38-BW. Recovery from surety 38-BX. Saving regarding charge 38-BY. Recovery from certain persons

PART VI Miscellaneous

39. Refund and payment of Interest 39-A. Refund of tax paid in respect of certain declared goods 39-B. Authority to refund forfeited amount (Omitted)

40. Notice regarding entering into partnership or dissolution of partnership

41. Notice of discontinuance of business or change of place of business

42. Liability to tax of a legal representative

43. Liability for payment of tax and penalty in respect of a firm, etc., discontinued or dissolved

44. Liability to tax of guardian, trustees, agents etc

45. Liability to tax of Managers, Receivers, etc

46. Declaration to be given in certain cases 46-A. Dealers to exhibit name boards 46-B. Notice to be displayed at a conspicuous place of business

47. Taking of evidence

48. Powers of certain officers to summon persons to give evidence

49. Forms of summons

50. Power of Appellate and Revisional Authority

51. Travelling allowance 51-A. Inspection of business place and confiscation of goods unaccounted (Omitted)

52. Under-valuation of goods and power to purchase Rules

53. Service of Notices, etc., 53-A. Fees for grant of copies 53-B. Fee for clarification of rate of tax

54. Particulars to be furnished by Banks, Clearing House and others 54-A. Returns and other particulars to be furnished by the forwarding agency and others 53-B. Furnishing documents under Section 28-C 53-C. Declaration of business place under Section 28-B

55. Composition of offence

56. Provisions relating to an Accountant or Sales Tax Practitioner A. Accountancy Examinations B. Educational qualifications

57. Conditions for purposes of appearance under clause (c) of Section 36

58. Authorisation of Agent to continue

59. Transfer of cases pending before Assessing Authority

60. Form of Cheque 60-A. Method of payment of money into Treasury or Bank 60-B. Registers, etc.,

61. Penalty 61-A. Penalty for failure to issue prescribed declarations

62. Forms to be used

63. Term of office and conditions of service of Chairman and Official Member

64. The terms and conditions of service Non-Official Member (Omitted) FORMS Forms

1. Application for the grant of a Certificate of Registration as a dealer 1-A. Combind Application Form

2. Certificate of Registration 2-A. Application for grant or renewal of certificate of Exemption in Form 2-B 2-B. Certificate of exemption from submission of returns

3. Statement of monthly turnover/value and tax paid in advance 3-A. Notice for demand of tax due as per return of turnover in Form 4 3-B. Statement of tax paid in advance

4. Return of turnover 4-A. Application for refund of tax paid on sales or purchases of goods specified in Section 5(4) 4-AA. Consent letter for Summary Assessment by a dealer 4-B. Return relating to Sugar-cane 4-C. Application for refund of tax paid on purchases of paddy specified in Section 5(4) 4-D. Declaration by the paddy procuring agent

5. Notice for tax due as per Form 3 5-A. Notice of Provisional Annual Assessment and demand for payment of Licence Fees (Omitted) 5-B. Notice of Provisional Assessment and Demand for Payment of Composition Amount under Section 17 5-C. Notice of Final Assessment and Demand for payment of compostiton amount under Section 17 5-D. Notice of Assessment and Refund Order / Refund Adjustment Order

6. Notice of final assessment and demand 6-A. Application for permission to pay finally assessed tax under the Karnataka Sales Tax Act, 1957, in insalments 6-B. Notice for payment of penalty

7. Notice of Final Assessment and Refund Order / Refund Adjustment Order 7-A. Notice of Final Assessment and Refund Order / Refund Adjustment Order [Omitted] Forms

8. Application for permission for composition of tax payable by the dealer 8-A. Permission for composition of tax payable by the dealer 8-AA. Application for permission for compostiton of tax payable by a dealer 8-AB. Permission for composition of tax payable by the dealer 8-AB. Notice of provisional assessment and demand for payment of composition amount under the first proviso to Section 25-B 8-C. Notice of final assessment and demand for payment of composition amount under the first proviso to Section 25-B 8-D. Notice of final assessment and refund order or refund adjustment order 8-E. Application for permission for composition of tax payable by a producer of granite metal by using stone crushing machinery 8-F. Permission for composition of tax payable by stone crushing unit 8-G. Application for permission for composition of tax payable by a dealer of lottery tickets 8-H. Permission for composition of tax payable by a dealer in lottery tickets 8-I. Weekly statement of a lottery ticket dealer 8-J. Annual return of a lottery ticket dealer

9. Statement in lieu of return of turnover / estimated turnover 9-A. Statement in lieu of return of turnover

10. Omitted 10-A. Omitted

11. Omitted

12. Omitted

13. Omitted

14. Delivery Note

15. Form of Appeal against an order of assessment under Section 12 and Section 20 of the Act Forms 15-A. Certificate of payment of admitted tax

16. Omitted

17. Omitted

18. Form of Appeal Memorandum to the Appellate Tribunal 18-A. Form of Memorandum of cross objections

19. Form of Application for Review to the Appellate Tribunal

20. Form of Memorandum of Civil Revision Petition under Section 23(1) of the Act

21. Memorandum of Civil Miscellaneous Petition under Section 23(7) of the Act

22. Memorandum of Civil Miscellaneous Petition under Section 24(4) of the Act

23. Memorandum of Appeal against order under Section 24(1) of the Act 23-A. Memorandum of Appeal against order of Authority for Clarification and Advance Rulings under Section 24(1) of the KST Act, 1957

24. Refund payment Order 24-A. Interest payment Order 24-B. Refund Payment Order 24-C. Interest Payment Order

25. Refund Adjustment Order 25-A. Interest Adjustment Order

26. Declaration under Rule 46 of the Karnataka Sales Tax Rules, 1957.

27. Form of summons under the Karnataka Sales Tax Act, 1957 Summons to appear and / or to produce documents 27-A. Notice calling for accounts and other documents under Section 28(1) of the Karnataka Sales Tax Act, 1957

28. List of Sales Tax Practitioners qualified under Section 36(c) of the Karnataka Sales Tax Act, 1957

29. Application for Enrolment as a Sales Tax Practitioner Forms

30. Authorisation of an Accountant or Sales Tax Practitioner to appear on behalf of a dealer before a Sales Tax Authority

31. Proposition Notice 31-A. Proposition Notice

32. Declaration to be furnished by a dealer in respect of goods mentioned in First, Second, Third and Fourth Schedules 32-A. Register of Declaration in Form 32 issued to other Dealers in the State 32-B. Declaration in respect of goods specified in Section 6-A 32-C. Registration of declaration in Form 32-B 32-D. Form of Declaration

33. Remitted in the Bank / Treasury 33-A. Challan for remittance of tax deducted at source under Section 19-A or 19-AA by Transfer Adjustment

34. Declaration

35. Security Bond for stay of collection of tax, fee or other amount in dispute

36. Return of clearing forwarding, transporting, shipping etc 36-A. Certificate

37. Form of declaration 37-A. Form of declaration

38. Register of declaration in Form 37 38-A. Stock and Utilisation Account of the inputs purchased against Form 37 38-B. Register of declaration in Form 37

39. Delivery Note – Original / Duplicate/Triplicate 39-A. Register of delivery notes maintaind under Rule 23-B(1-A)(iii) 39-AA. Application for issue of Transit Pass 39-B. Permit 39-BB. Register of permit maintained under Rule 23-BB 39-C. Delivery Note 39-D. Register of Delivery Notes in Form 39-C

40. Certificate of tax, etc., due Forms

41. Notice

42. Warrant of distraint or attachment

43. Attachment of a bebt not secured by negotiable instrument/ share in a corporation / movable property not in the possession of the defaulter except property in the custody of a Court

44. Attachment of a decree

45. Attachment of the share or interest in property

46. Prohibitory Order

47. Proclamation of sale

48. Notice of attachment of immovable property

49. Sales Certificate

50. Certificate of tax Deduction 50-A. …………………………………………… 50-B. Monthly Statement of Tax deducted at source for the period from 50-C. Certificate in respect of works contract

51. Reimbursement of wrongfully collected tax under the Karnataka Sales Tax Act, 1957 52-A. …………………………………………….

52-B. ……………………………………………..

52-C. ……………………………………………..

53. Clearance Certificate to Registered dealers

54. Before the Authority for clarification and Advance rulings RULES

PART I INTRODUCTION In exercise of the powers conferred by sub-sections (1) and (2) of section 38 of the Karnataka Sales Tax Act, 1957 (Karnataka Act No. 25 of 1957), the Government of Karnataka hereby makes the following rules, the draft of the same having been previously published as required by sub-section

(1) of the said section.

RULE1 SHORT TITLE.- These rules may be called the Karnataka Sales Tax Rules,1957.

RULE 2 COMMENCEMENT.- They shall be deemed to have come into force on the first day of October, 1957.

RULE3 Definitions.- In these rules unless the context otherwise requires –

(a) "The Act" means the Karnataka Sales Tax Act, 1957;

(b) "Fees" means any fee leviable under the provisions of the Act;

(c) "Form" means a form appended to these Rules;

(d) "Governmenttreasury" means in relation to a dealer registered within the jurisdiction of any Assistant Commissioner of Commercial Taxes or Commercial Tax Officer, the treasury of the district or the taluk where the dealer's place of business, or if he has more than one such place, where his principal place of business within that jurisdiction is situated;

(e) Omitted;

(f) Omitted;

(g) Omitted;

(h) "Registering Authority" means a registering authority specified in Rule 4;

(i) "Schedule" means a schedule to the Act;

(j) "Section" means a section of the Act.

PART

PART II Turnover and Assessment RULE 4 REGISTERING AUTHORITY.-

(1) The Commercial Tax Officer of an area shall be the registering authority, in respect of dealers, -

(a) doing business within the limits of the corporation of the city of Bangalore and whose total turnover does not exceed Seven lakh fifty thousand rupees in a year;

(b) doing business in other areas and whose total turnover does not exceed [seven lakh fifty thousand] rupees in a year.

(2) The Assistant Commissioner of Commercial Taxes of an area shall be the registering authority in respect of dealers, -

(a) doing business within the limits of the corporation of the city of Bangalore and whose total turnover exceeds seven lakh fifty thousand rupees in year;

(b) doing business in other areas and whose total turnover exceeds seven lakh fifty thousand rupees in a year :

Provided that in an area in which there is no Commercial Tax Officer, the Assistant Commissioner of Commercial Taxes shall be the registering authority in respect of all dealers in that area.

(3) In respect of all casual traders and dealers other than casual traders doing business in the State but not having a fixed place of business, irrespective of their turnover, the registering authority shall be such Assistant Commissioner of Commercial Taxes as the State Government or the Commissioner may, by notification in this behalf, appoint.

(4)OMITTED [(4)Notwithstanding anything contained in sub-rules (1), (2) and (3), in respect of dealers doing business in any area, in liquor, gold articles including jewellery and iron and steel “[coffee hulling units] and in such other goods as the Government or Commissioner may notify from time to time, the Registering Authority shall be the Assistant Commissioner of Commercial Taxes of that area.]

RULE 5 ASSESSING AUTHORITY.-

(1) The registering authority of an area shall be the assessing authority in respect of dealers in that area.

(2) Notwithstanding anything contained in sub-rule (1), a Deputy Commissioner of Commercial Taxes shall be an assessing authority in respect of any specified cases or classes of cases referred to him by the Commissioner.

RULE 6 DETERMINATION OF TOTAL AND TAXABLE TURNOVER.-

(1) The total turnover of a dealer, for the purposes of the Act, shall be the aggregate of –

(a) the total amount paid or payable by the dealer as the consideration for the purchase of any of the goods in respect of which tax is leviable at the point of purchase under one or more of the provisions specified hereunder, where such purchase has taken place inside the State, -

(i) clause (b) of sub-section (3) of section 5;

(ii) sub-section (4) of section 5;

(iii) section 6;

(iv) Omitted;

(b) the total amount paid or payable to the dealers as the consideration for the sale, supply or distribution of any goods other than those coming under clause (a) where such sale, supply or distribution has taken place inside the State;

(c) the total amount paid or payable to the dealer as the consideration for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract; and includes any amount paid as advance to the dealer as a part of such consideration;

(d) the total amount paid or payable to the dealer as the consideration for transfer of the right to use any goods for any purpose (whether or not for specified period);

(e) the total amount payable to the dealer as the consideration in respect of goods delivered on hirepurchase or any system of payment by instalments;

(f) the aggregate of the sale prices received and receivable by the dealer in respect of sales of any goods in the course of inter-State trade or commerce as determined in accordance with the provisions of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), as also in respect of sales of any goods in the course of export out of the territory of India and also in respect of sales of goods in the course of import into the territory of India.

(2) Omitted.

(3) Omitted.

(4) In determining the taxable turnover, the amount specified in clauses (a) to (p) shall, subject to the conditions specified therein, be deducted from the total turnover (as determined under clauses (a) to

(e) of sub-rule (1).

(a) All amounts allowed as discount, provided that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of a contract or agreement entered into in a particular case and provided also that the accounts show that the purchaser has paid only the sum originally charged less discount.

(b) (i) All amounts allowed to purchasers in respect of goods returned by them to the dealer when the goods are taxable on sales provided that the goods were returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made;

(ii) all amounts received from the sellers in respect of goods returned to them by the dealer, when the goods are taxable on the purchase value provided that the goods were returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which and the amount for which refund was received.

(c) All amounts for which the dealer sells articles which are not in his stock but which are obtained by him from another dealer specially to accommodate a particular customer and are immediately sold to such customers provided that the sale is entered in the accounts then and there as an accommodation sale together with the name of the dealer from whom the articles were obtained and provided that the accommodating dealer does not make a profit out of the transaction.

(d) All amounts for which goods specified in the Fifth Schedule are sold subject to the conditions and exceptions, if any, set out therein.

(e) Omitted

(ee) All amounts falling under the head "charges for packing material" when they are not charged for separately in the bill by the dealers.

(f) All amounts which are actually incurred under the head "freight" when specified and charged for by the dealer separately without including such amounts in the price of the goods sold.

(ff) All amounts falling under the head "charges for packing", that is to say, the cost of packing materials and cost of labour for packing in respect of goods not liable to tax at the hands of the assessee, whether or not such amounts are specified and charged for by the dealer separately.

(g) All amounts realised by the sale by a dealer of his business as a whole.

(h) All amounts collected by way of tax under the Act by a dealer.

[(hh) all amounts separately collected in the sake bills by way of commission under the provisions of the Agricultural Produce Marketing (regulations) Act, 1966, by a commission agent provided that the sales tax is not separately charged for and collected in the sales bills on such commission.]

(i) All amounts for which the goods specified in the Second, Third and Fourth Schedules are sold or purchased by a dealer when such sales or purchases are exempt from the tax leviable under any of the provisions of the Act.

[i-1) charges levied as litre fee under sub-rule (2) of Rule 2 of the Karnataka Excise (Duties and Fees) Rules, 1968;]

(j) Omitted

(k) All amounts for which any goods are sold or purchased by a dealer when such sales or purchases are specifically exempted from tax under any of the provisions of the Act.

(l) All amounts received or receivable by way of interest on the unpaid amount payable in respect of goods delivered on hire-purchase or on any system of payment by instalments, where such interest is specified and charged for by the dealer separately without including such amounts in the price of the goods delivered :

PROVIDED that the interest allowed under this clause shall be actual interest charged subject to a maximum of twenty per cent per annum on the amount remaining unpaid.

[(l-1) charges levied as litre fee under sub-rule (2) of Rule 2 of the Karnataka Excise (Duties and Fees) Rules 1968;]

(m) In the case of works contracts specified in Serial Numbers 1,2,3,4,5,7,8,9,10,11,12, 17, 26, 27, 35, 36, 40 and 42 of the Sixth Schedule, -

(i) all amounts received or receivable in respect of goods other than the goods taxable under subsection (1A) or (1B) of section 5 which are purchased from registered dealers liable to pay tax under the Act and used in the execution of works contract in the same form in which such goods are purchased.

(ii) all amounts actually expended towards labour charges and other like charges for erection, installation, fixing, fitting out, or commissioning of the goods specified in the said serial numbers;

(iii) all amounts received in respect of goods which are specifically exempted from tax under any of the provisions of the Act;

(iv) all amounts paid to sub-contractors as the consideration for execution of works contract whether wholly or partly :

PROVIDED that no such deduction shall be allowed unless the dealer claiming deduction produces proof that the sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amounts included in the monthly statement or return of turnover, as the case may be, filed by such sub-contractor;

[(v) such amounts calculated at the rate specified in column (3) of the Table below towards, labour charges and other like charges for erection, installation, fixing, fitting out, or commissioning of the goods specified in the said serial numbers when such charges are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority.

TABLE Sl.

No.

Type of contract Charges for erection, installation, fixing, fitting out or commissioning as a percentage of the value of the contract

(1) (2) (3)

1. Installation of plant and machinery Fifteen per cent 2 Installation of air conditions and air coolers Ten per cent 3 Installation of elevators (lifts) and escalators Fifteen per cent 4 Fixing of marble slabs, polished granite stones and tiles (other than mosaic tiles) Twenty-five per cent 5 Any other works contract Twenty per cent]

(n) In the case of works contracts specified in serial numbers 6, 13, 14, 15, 16, 18, 19, 20, 21, 22, 23, 24, 25, 28, 29, 30, 31, 32, 33, 34, 37, 38, 39 and 41 of the Sixth Schedule,

(i) all amounts received or receivable in respect of goods other than the goods taxable under sub section (1-A) or (1-B) of Section 5 which are purchased from registered dealers liable to pay tax under the Act;

[(i) all amounts received or receivable in respect of goods specified in second, third and fourth schedules which are purchased from registered dealers liable to pay tax under the Act;]

(ii) all amounts received or receivable in respect of goods which are specifically exempted from tax under any of the provisions of the Act;

(iii) all amounts paid to sub-contractors as the consideration for execution of works contract whether wholly or partly :

PROVIDED that no such deduction shall be allowed unless the dealer claiming deduction produces proof that the sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amounts is included in the monthly statement of return of turnover, as the case may be, filed by such sub-contractor,

(iv) such amounts towards labour charges and other like charges not involving any transfer of property in goods actually incurred in connection with the execution of works contract; or

(v) such amounts calculated at the rate prescribed in column (3) of the table below, if they are actually incurred towards ‘ labour charges ‘ and other like charges and are not ascertainable from the books of accounts maintained and produced by a dealer before the Assessing Authority.

TABLE Sl.

No.

Type of contract Labour or other charges as a percentage of the value of the contract 1 2 3 1 Civil works like construction of buildings, bridges, roads, etc.

Thirty per cent 2 Construction of railway coaches on under carriages supplied by Railways Thirty per cent 3 Ship and boat building including construction of barges, ferries, tugs, trawlers and draggers Twenty per cent 4 Sanitary fittings for plumbing, for drainage, etc. Fifteen per cent 5 Painting and polishing Twenty per cent 6 Construction of bodies of motor vehicles and construction of trucks Twenty per cent 7 Laying pipes Twenty per cent 8 Tyre retreading Forty per cent 9 Dyeing and printing of textiles Forty per cent 10 Any other works contract Thirty per cent.]

Provided that where the turnover of a dealer claiming deduction under clauses (m) and (n) in any year is not sufficient to cover the deduction, it shall be allowed to the extent of the turnover of the dealer in that year, and the balance shall be carried forward to the year following next and so on.]

[(0) in the case of composite contracts specified in Seral Number 44 of the Sixth Schedule all amount specified in clause (m) or (n) or (p), as the case may be, relating to the constituent works contracts falling under such of the Serial Number of Sixth Schedule referred to in those clauses;]

[(p) in the case of works contract specified in Serial Number 43 of the Sixth Schedule, all amount specified in clause (n), subject to conditions specified therein.]

[Explanation-I.- For the purpose of clauses (m) and (n) of sub-rule (4), ‘labour and other like charges’ include, charges for obtaining on hire or otherwise machinery and tools used for execution of Works Contract, charges for planning, designing and architects’ fees, cost of consumables used in the execution of the Works Contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services.

Explanation-I.- For the purpose of [clauses (m), (n), (o) and (p)] of sub-rule (4), ‘labour and other like charges’ include, charges for obtaining on hire or otherwise machinery and tools used for execution of Works Contract, charges for planning, designing and architects’ fees, cost of consumables used in the execution of the Works Contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services.

Explanation-I.- For the purpose of [clauses (m), (n), and (o)] of sub-rule (4), ‘labour and other like charges’ include, charges for obtain in on hire or otherwise machinery and tools used for execution of Works Contract, charges for planning, designing and architects ‘fees, cost of consumables used in the execution of the Works Contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services.

Explanation-I.- For the purpose of [clauses (m) and (n)] of sub-rule (4), ‘labour and other like charges include, charges for obtaining on hire or otherwise machinery and tools used for execution of Works Contract, charges for planning, designing and architects’ fees, cost of consumables used in the execution of the Works Contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services.

Explanation-II.- For the purpose of clauses (m) and (n) of sub-rule (4), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of works contract in proportion to the ratio of their constitution in the total turnover.

Explanation-II.- For the purpose of [clauses (m), (n), (o) and (p)] of sub-rule (4), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of works contract in proportion to the ratio of their constitution in the total turnover.

Explanation-II.- For the purpose of [clauses (m), (n), (o) and (p)] of sub-rule (4), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of works contract in proportion to the ratio of their constitution in the total turnover.

Explanation-II.- For the purpose of [clauses (m) & (n)]of sub-rule (4), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of works contract in proportion to the ratio of their constitution in the total turnover.

Explanation-III.- For the purposes of sub-rule (4), the expression “in the same form” used in subclause (i) of clause (m) shall not include such goods which, after being purchased, are either consumed or used in the manufacture of other goods which in turn are used in the execution of works contract.]

RULE6-A PROVISION RELATING TO DECLARATION UNDER SECTION 6-A.-

(1) The declaration referred to in the proviso to sub-section (2) of section 6-A shall be in Form 32-B.

[(1-A) A buying dealer in cases specified in the second proviso to sub-section (2) of Section 6-A shall furnish, within thirty days from the commencement of the Karnataka Sales Tax (First Amendment) Rules, 2002, to his assessing authority bills in original, issued by the selling dealers, relating to purchase of goods along with proof of payment towards the said purchase in respect of which the declaration specified in sub-rule (1) above I not furnished and such assessing authority after obtaining a certificate from the assessing authority of the selling dealer that the tax on the goods sold to the buying dealer is liable to be paid or has already been paid by the selling dealer shall allow the claim of the buying dealer for exemption of tax on such purchase:

Provided that before rejecting any claim under this sub-rule, the assessing authority shall give a reasonable opportunity to the dealer to show cause against such rejection.]

(2) Every dealer who is required to issue the declaration specified in section 6A shall obtain on payment of ten rupees per book of fifty forms or twenty paise per form from the assessing authority blank declaration form referred to in sub-rule (1) and shall furnish to the purchasing dealer the original and duplicate portion thereof duly filled in and signed by him or by any responsible person authorised by him in this behalf, and shall retain the triplicate with him.

(3) No selling dealer shall give a declaration except in form obtained by him on application from the assessing authority, and not declared obsolete or invalid under this rule.

(4) No purchasing dealer shall accept any declaration except in the form obtained by the selling dealer on application from the assessing authority as aforesaid, which is not declared obsolete or invalid.

(5) A dealer who claims exemption from liability to tax in respect of goods mentioned in the proviso to sub-section (2) of section 6A shall attach to his return of turnover in which that sale or purchase, as the case may be, is included the portion marked "Original" of the declaration received by him from the selling dealer and shall also produce for inspection the portion of it marked "duplicate" if the assessing authority, in his discretion, directs him so to do :

PROVIDED that in case of delayed receipt of declaration forms, the dealer may submit them at any time before the assessment is made.

(6) Every declaration form obtained from the assessing authority by a dealer shall be kept by him in safe custody and he shall be personally responsible for the loss, destruction or theft of any such form or the loss of revenue to the State Government, if any, resulting directly or indirectly from such theft or loss.

(7)(a) Account of the declaration form shall be maintained by a dealer in the form of a register in Form 32C complete and an up-to-date abstract of said accounts shall be furnished by the dealer to his assessing authority, whenever so required, and in any case, a complete annual abstract thereof shall be furnished by him along with the annual return of his turnover for each year;

(b) If any declaration in Form 32B is lost, destroyed or stolen, the dealer shall report the fact to the assessing authority immediately, and as directed by the assessing authority make appropriate entries in the remarks column of the register in Form 32C and take such other steps to issue public notice of the loss, destruction or theft;

(c) Where a blank or duly completed form of declaration in Form 32B is lost in the custody of either the selling dealer or the purchasing dealer, such selling dealer or the purchasing dealer, as the case may be, shall furnish in respect of every such form an indemnity bond to his assessing authority, for such sum as the assessing authority may, having regard to the circumstances of the case fix :

PROVIDED that where more than one declaration form is lost, the dealer may furnish one such indemnity bond to cover all the declaration forms so lost;

(d) Where a duly completed form of declaration furnished by the selling dealer has been lost in the custody of purchasing dealer, the dealer purchasing the goods may demand from the selling dealer who sold the goods, a duplicate of such form and the same shall be furnished with the following declaration recorded in red ink and signed by the selling dealer on all the three portions of such form.

"I hereby declare that this is the duplicate of the declaration form No. .......... signed on ..................... and issued to ................... whois a registered dealer and whose registration certificatenumber is ............".

(8) Any unused declaration form held in stock with a dealer shall be surrendered to the Assessing Authority on the discontinuance of the business by the dealer or cancellation of his certificate of registration or on his ceasing to be an assessee.

(9) No dealer to whom a declaration form is issued by an assessing authority, shall either directly or through any other person, transfer the same to another person, except as provided in sub-rule

(2).

(10) A declaration form in respect of which a report has been received by the assessing authority under sub-rule (7) (b) shall be deemed to have been declared to be invalid.

(11) The Assessing Authorities shall from time to time publish in the Karnataka Gazette, the particulars of the declaration form in respect of which a report has been received under sub-rule

(7)(b).

(12) The State Government, may, by notification, declare that declaration form of a particular description shall be deemed to be obsolete or invalid with effect from such date as may be specified in such notification.

(13) On publication of the notification referred to in sub-rule (12), all dealers shall on or before the date with effect from which the forms are so declared to be obsolete or invalid, surrender to the assessing authority all unused forms of the said description as may be in their possession and obtain in exchange such new forms as may be substituted for the form declared obsolete or invalid:

PROVIDED that new form shall not be issued to a dealer until he has rendered account of old forms lying with him and returned the balance, if any, in his hand to the Assessing Authority.

RULE 6-B Declaration to be obtained in respect of branded goods.- Every dealer in goods taxable at the point of first sale in the State, shall, if he is not liable to tax on such goods by reason of his sale being to the trade mark or brand name holder obtain a declaration in From No. 32 D from such trade mark or brand name holder. The declaration so obtained shall along with return in From 4 for the period to which such sale relates along with a statement of such declaration showing the name and address of the dealers to whom the goods were sold with particulars of sale bill, quantity and value and the total turnover covered by such declaration.]

RULE 7 RETURNS TO BE SUBMITTED BY THE HEAD OFFICE.-

(1) In the case of a dealer having more than one place of business, the aggregate turnover of all such places of business shall be taken as the turnover of the business for the purposes of these Rules.

(2) All returns prescribed by these Rules shall in the case of dealers referred to in sub-rule (1) be submitted by the head office in the State and shall include the total turnover of all the branches of his business.

Each branch shall also -

(a) submit to the assessing authority of the area in which it is situated, a return of the total turnover of the branch in Form 4; and

(b) intimate to such authority the fact that the return of the total turnover of its business is included in the return submitted by its head office and specify the name and address of such Head Office :

PROVIDED that the Commissioner may, for reasons to be recorded in writing, exempt a dealer having more than one place of business, from submitting a return of turnover in respect of each branch to the assessing authority of the area in which it is situated RULE 8 COMPOSITION OF TAX.-

(1) Subject to the provisions of section 17, the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer having jurisdiction may,on an application in Form 8 accompanied by a statement in Form 9 from any dealer other than the dealer liable to tax under clause (a) of subsection (3) of section 5, or a dealer referred to in sub-section (2) of section 10 on being satisfied after such verification as may be necessary that the turnover of such dealer during a year is not likely to exceed the amounts specified in sub-sections (1), (4) and (8) of section 17 as the case may be, permit such dealer, subject to the conditions specified in sub-rule (2), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted an amount by way of composition as provided in the said section.

[[1-A)(a) Subject to the provisions of Section 17, the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer having jurisdiction may, on application in Form 8 from a dealer and on being satisfied after such verification as may be necessary that the turnover of such dealer during a year is not likely to exceed the amounts specified in sub-section (4) of Section 17, or elected for payment of tax by way of composition under sub-section (8) of Section 17, may permit such dealer, subject to the conditions specified in sub-rule (2), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted an amount by way of composition as provided in the said section.

(b)The dealer who is permitted to pay tax under sub-section (4), or sub-section (8) of Section 17, shall file a statement of monthly turnover in Form 3 in duplicate to the assessing authority, so as to reach within twenty days after the close of the month to which such statement relates, Such statement or return shall be accompanied by a receipt from a Government Treasury, a crossed postal order, a crossed cheque or a crossed demand draft in favour of the Assessing Authority or the Registering Authority, as the case may be and encashable at a post office/bank situated in the place of location of the office of the Assessing authority or the Registering Authority as the case may be for the full amount of tax payable by him on the basis of his actual taxable turnover during the month to which the statement or return relates.]

[(2) (i) The application for grant or renewal of such permission shall be made in Form 8 during the year for which composition is applied for, within thirty days from the date of commencement of such year :

Provided that the [ Assistant Commissioner of Commercial Taxes or Commercial Tax Officer] having jurisdiction may, on sufficient cause being shown, and for reasons to be recorded in writing condone the delay in respect of application made after the expiry of such period of thirty days but within a period of ninety days from the date of commencement of such year:

Provided further that the [ Commercial Tax Officer ] or the [ Assistant Commissioner of Commercial Taxes having jurisdiction may condone the delay in respect of application made by a hotelier or a restaurateur for the assessment years 1982-83 and 1983-84 after the expiry of such period of thirty days but within 31st day of March, 1984.]

[Provided also that the Commercial Tax Officer or the Assistant Commissioner of Commercial Taxes having jurisdiction may condone the delay in respect of application made by a dealer in silk fabrics for the assessment year 1995-96 after the expiry of such period of thirty days but within thirtieth day of June,1996.]

[ (i-a) the application for grant of such permission by a dealer who has commenced his business during the course of any year shall be made in Form 8 within thirty days from the date of commencement of the business:

Provided that the [Assistant Commissioner of Commercial Taxes or Commercial Tax Officer] , may on sufficient cause being shown and for reasons to be recorded in writing condone the delay in making an application in respect of an application made after the expiry of such period of thirty days but within a period of ninety days from the date of commencement of the business or before the close of the year, whichever is earlier:]

[Provided further that the [Commercial Tax Officer or the Assistant Commissioner or Commercial Taxes] having jurisdiction may condone the delay in respect of application made by a hotelier or a restaurateur for the assessment years 1982-83 and 1983-84 after the expiry of such period of thirty days but within 31st day of March, 1984:]

(ii) Such permission for composition shall be granted within thirty days from the date of receipt of an application, during the year for which the composition is applied for. The permission shall be in Form 8A and shall be for one year and may be renewed from year to year on an application made by the dealer in that behalf in Form 8. Such permission shall be valid, unless it is cancelled for any of the reasons specified in clauses (iv) and (v), for the entire year to which it relates;]

(iii) (a) The dealer electing to compound the tax under sub-section (1) or sub-section (4) of section 17 shall furnish a provisional statement in Form 9 detailing therein the particulars of purchases and sales effected by him during the previous year and the purchases and sales likely to be effected during the year for which composition is applied for along with an application for grant or renewal of such permission, and on receipt of such statement in Form 9, the [Assistant Commissioner of Commercial Taxes or Commercial Tax Officer ] may [provisionally permit the dealer to pay the amount composition of tax as provided under section 17].

(b) Every dealer permitted to pay tax at compounded rates under section 17 shall submit an annual statement in Form 9 within 30 days from the close of the year detailing therein the actual turnover of his purchases and sales effected during the preceding year. On receipt of such annual statement, the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer, after making such enquiry or modification as he deems fit and after giving such dealer a reasonable opportunity of being heard in a case where the statement of the dealer is not accepted, determine the composition amount payable by the dealer in respect of the preceding year. After making the final assessment, the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer shall examine whether any and if so, what amount is due from the dealer after deducting the amount of composition already paid as per provisional demand, if any amount is found to be due from the dealer towards the final assessment, the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer shall serve upon the dealer, a notice in Form 5C and the dealer shall pay the sum demanded within the time and in the manner specified in the notice. If the amount of composition on the final assessment is lower than the amount already paid, the excess amount may either be refunded or adjusted towards the Instalments of amount of tax and the assessing authority shall serve upon the dealer a notice in Form 5D along with a refund payment order in Form 24 or a refund adjustment order in Form 25 or both, as the case may be. If the final assessment is equal to the amount already paid the Assistant Commissioner of Commercial Taxes or Commercial Tax Officer shall inform the dealer accordingly;

(iv) The [Assistant Commissioner of Commercial Taxes or Commercial Tax Officer] may cancel such permission, if,

(a) the dealer fails to pay in any month the instalments fixed within the time specified; or

(b) the dealer contravenes any provision of the Act or the Rules made thereunder.

(v) The [Assistant Commissioner of Commercial Taxes or Commercial Tax Officer ] shall cancel such permission if during the year the turnover of the dealer exceeds [the amount specified in sub-section

(1) or sub-section (4) of section 17]; and any amount paid by such dealer during the year by way of composition in accordance with the provisions of sub-section (1) or sub-section (4) of section 17 shall be adjusted towards the tax payable for the year.]

RULE 8-A COMPOSITION OF TAX IN THE CASE OF JAGGERY MANUFACTURERS USING POWER CRUSHERS.

RULE 8-B COMPOSITION OF TAX IN THE CASE OF DEALERS EXECUTING WORKS CONTRACTS.-

(1) The dealer who elects to compound the tax for any year under sub-section (6) of section 17, shall submit an application in Form 8-AA to the Assessing Authority each year,within one hundred and twenty days from the date of commencement of such year, or of the business if he has commenced the business during the course of the year and such application once filed by the dealer electing in compound the tax shall not be permitted to be withdrawn by him];:

(2) (i) The assessing authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in sub-section (6) of section 17.

(ii) Such permission for composition shall be granted within thirty days from the date of receipt of the application during the year for which the composition is applied for. The permission shall be in Form 8AB and shall be valid for the entire year to which it relates.

(iii) The Assistant Commissioner of Commercial Taxes or Commercial Tax Officer may cancel such permission, if the dealer-

(a) fails to pay tax in any month within the time specified, or

(b) contravenes any provisions of the Act or the Rules made thereunder.]

RULE8-C Composition of tax in the case of dealers producing granite metal by using stonecrushingmachinery.-

(1) The dealer who elects to compound the tax for any year under sub-section (9) of Section 17, shall submit an application in From 8-E to the assessing authority each year, within thirty days from the date of commencement of such year, or of the business if he has commenced the business during the course of the year;

Provided that the assessing authority having jurisdiction may on sufficient cause being shown and for reasons to be recorded in writing condone the delay in respect of applications made after the expiry of such period of thirty days but within a period of ninety days from the date of commencement of such year or the business, as the case may be.

(2) (i) The assessing authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in subsection (9) of Section 17.

(ii) Such permission for composition shall be granted within thirty days from the date of receipt of the application during the year for which the composition is applied for. The permission shall be in Form 8-F and shall be valid for the entire to which it relates.

(iii)The Assistant Commissioner of Commercial Taxes or Commercial Tax Officer may cancel such permission, if the dealer.-

(a) Fails to pay tax in any month within the time specified; or

(b) Contravenes any provision of the Act or the Rule made thereunder.]

RULE 8-D Composition of tax in the case of dealer selling lottery tickets.-

(1) The dealer who elects to compound the tax for any year under sub-section (10) of Section 17 shall submit an application in From 8-G to the Assessing Authority each year, within sixty days from the date of commencement of such year, or of the business if he has commenced the business during the course of the year.

(2)(i) The Assessing Authority having jurisdiction, after such verification as may be necessary permit such dealer, subject to the conditions specified in sub-rule (1), to pay in lieu of the amount of tax payable by him during the year, in respect of which such permission is granted, an amount by way of composition as provided in sub-section (10) of Section 17.

(ii) Such permission for composition shall be granted within thirty days from the date of receipt of the application during the year for which the composition is applied for. The permission shall be in Form 8-H and shall be valid for the entire year to which it relates.

(iii) The Assessing Authority may cancel such permission, if the dealer.-

(a) fails to pay tax in any month within the time specified; or

(b) contravenes any provision of the Act or the rule made thereunder.

(3) The dealer permitted to pay tax under sub-section (10) of Section 17 shall file a weekly statement of draws in Form 8-I in duplicate to the Assessing Authority so as to reach it within 10 days from the beginning of any week commencing from Sunday to Saturday, to which such statement relates, along with a receipt from a Government Treasury, a crossed postal order, a crossed cheque or a crossed demand raft in favour of the Assessing Authority encashable at a post office or bank situated in the place or location of the office of the Assessing Authority.

(4) Every dealer permitted to pay tax under sub-section (10) of Section 17 shall submit an annual return in Form 8-J in duplicate to the Assessing Authority so as to reach it within 30 days after the close of the year to which the return relates, showing the actual number and type of draws relating to sale of lottery tickets effected during the year.]

RULE 9 REGISTRATION OF DEALERS.-

(1) [Every dealer doing business, but not liable to get himself registered and every dealer liable to get himself registered under sub-section (1) of section 10, shall submit to the registering authority of the area in which his principal place of business is situated, an application for registering, within thirty days of his total turnover reaching the amount specified under sub-section (1) of section 10.]

(2) Every person liable to get himself registered under sub-section (2) of section 10 shall submit to the registering or the assessing authority, as the case may be, of the area in which his principal place of business is situated, an application for registration within thirty days from the date of publication of the Karnataka Sales Tax (Amendment) Rules, 1964, if he was carrying on business on such date or within thirty days from the date of commencement of his business, if he commences his business after the date of such publication.]

[(2-A) Every person liable to get himself registered under sub-section (3) of section 10 shall submit to the registering authority of the area in which his principal place of business is situated, an application for registration within thirty days from the date of commencement of the Karnataka Sales Tax (Amendment) Rules, 1974, if he was carrying on the business on such date or within thirty days from the commencement of his business, if he commences his business after the date of such publication.]

(3) Any dealer who is not bound to submit an application for registration under sub-rules (1) and (2) may, if he so desires, apply for registering under section 10 to the Registering Authority of the area in which his principal place of business is situated.

[(4) (i) Every application under sub-rules (1), (2), (2a) or (3) shall be made in Form 1 to the Registering Authority.

[ Provided that in respect of an industrial undertaking, whose project is approved either by the State High Level Clearance Committee or State Level Single Window Clearance Committee or District Level single window Committee, a combined application form in Form 1-A may be submitted.]

(ii) Every application shall be made, signed and verified in the case of a business carried on by, -

(a) an individual, by the proprietor or by a person having due authority to act on behalf of such proprietor;

(b) a firm, by a partner thereof;

(c) a Hindu undivided family, by the karta or an adult member thereof,

(d) a body corporate including a company, a co-operative society, or a corporation or local authority, by a director, manager, secretary, or the principal officer thereof or by a person duly authorised to act on its behalf;

(e) an association of individuals to which sub-clauses (b),(c) or (d) do not apply by the principal officer or person managing the business.

(iii) The person signing and verifying an application for registration shall specify the capacity in which he does so, and shall wherever possible give particulars of the authority vested in him for signing and verifying the application.

(iv) Every person signing and verifying an application for registration in the capacity specified in subclauses (a), (b), (c) or (e) of clause (ii) shall also furnish with the application two copies of his recent photograph in passport size at the time of registration and shall also furnish such photograph once in every five years.

(v) The person so furnishing the photograph shall when called upon to do so attend before the registering authority and sign before him on the copies of the photographs furnished by him.

(vi)Every dealer other than a corporate body residing outside the State but carrying on business in the State and is liable to get himself registered under clauses (iii) and (iv) of sub-section (2) of Section 10 shall also furnish with the application a domicile certificate with permanent residential address in the state in which such dealers ordinarily reside obtained from the jurisdictional Tahsildar of that State.]

(vii) Everydealer applying for registration shall also furnish with the application authenticated copies of the documents relating to lawful possession of the place or places in which he carries on business and such place or places of business in the case of a dealer other than a corporate body shall not be the place of business of any other dealer registered or liable for registration under the Act.]

Explanation: Clauses (iii) to (vi) of this sub-rule shall apply to every dealer registered under the Act prior to coming into force of the said clause and he shall comply with the said clauses within ninety days from the date on which the said clauses come into force.

(5) Each application for registration shall he accompanied by a receipt from a government treasury or a crossed cheque or a money order in favour of the registering authority for [ two hundred and fifty rupees ] [and for such additional sum as is required to cover the fee payable for the issue of copies of the registration certificate under sub-section (3) of section 10-A.]

[omitted]

(6) The Registering authority receiving the application shall, if he is satisfied after making such inquiry as he thinks necessary, that the particulars contained in the application are correct and complete, register the dealer and grant him a certificate of registration in Form 2 after the same is duly countersigned by the [Joint Commissioner of Commercial Taxes] and also a copy of such certificate for every place business within the State other than the principal place of business mentioned therein. Such certificate shall be held by the dealer subject to the provisions of the Act and these Rules and to the restriction and conditions specified in that certificate.

(7) When the said authority is not satisfied that the particulars contained in the application are correct and complete, he shall reject the application for reasons to he recorded in writing :

PROVIDED that such rejection shall not be made before giving the applicant an opportunity of heard in the matter.

(8) Every registered dealer shall, until his registration is cancelled, continue to pay the fee of two hundred and fifty rupees specified in sub-rule (5), for every year subsequent to that in which he applied for registration, within thirty days after the commencement of that year.

(9) Every registration certificate granted under sub-rule (6) shall be deemed to have been granted personally to the dealer specified therein. No registration certificate shall be sold or transferred.

(10) The certificate of registration granted under sub-rule (6) shall be exhibited at a conspicuous place within the premises of the principal place of business mentioned in the certificate and a copy of such certificate shall also be exhibited at a conspicuous place within the premises of every other place of business mentioned in the certificate.

(11) Every registered dealer, who discontinues or transfers his business or otherwise gets his registration certificate cancelled shall forthwith surrender to the registering authority the certificate of registration and the copies thereof, if any, granted to him.

RULE 9-A Suo Motu Registration.-

(1) Where a dealer liable to get registered under Section 10, has failed to do so, the Registering Authority of the area shall proceed to register such person under Section 10-B after conducting such survey, inspection or inquiry as specified in sub-rules (2), (3) and (4).

(2)The Registering Authority may inspect the offices, shops, business premises, godown, vessels, receptacles or vehicles belonging to the dealer and may also conduct inquiry as he may consider necessary for the purposes of determining the total turnover of the year.

(3) The Registering Authority may visit the business premises of the dealer including any place or receptacle or vehicle where the dealer has stored his goods and obtain stock inventory of the goods held in stock and on that basis arrive at the approximate stock value of the goods taking into consideration of the prevailing market rates or the purchase invoices if any produced.

(4) The Registering Authority may also record the daily sales particulars as per the books of accounts maintained and produced and if the books of accounts are not produced or if the particulars recorded in the books of accounts, in the opinion of the Registering Authority are not true and correct, he may proceed to estimate the same on the basis of any other material which he considers relevant.

(5) The Registering Authority may proceed to estimate the total turnover in a year for the purpose of registration either on the basis of daily sales particulars or on the basis of stock value whichever he considers more relevant.]

RULE 10 AMENDMENT OF REGISTRATION CERTIFICATE.-

(1) Where a dealer desires that the certificate of registration granted to him under these Rules to be amended, he shall submit an application for this purpose to the registering authority or the assessing authority, as the case may be, setting out the reasons therefor, together with the certificate of registration and the copies thereof, if any, granted to him; and such authority may, if satisfied with the reasons given, make such amendments, as it thinks necessary, in the certificate of registration and the copies thereof, if any, granted to him :

PROVIDED that the amendments so made shall not be inconsistent with the provisions of the Act or these Rules.

(2) The provisions of sub-rule (10) of rule 9 shall apply in relation to such amendment certificate and copies thereof, as they apply in relation to the original certificate and copies thereof.

RULE 11 ISSUE OF DUPLICATE REGISTRATION CERTIFICATE.- Where a registration certificate granted under these Rules, is lost, destroyed defaced or mutilated, duplicate copy of the certificate of registration may be granted by the registering authority or the assessing authority, as the case may be, if he is satisfied of such loss, destruction, defacement or mutilation on payment of a fee of one hundred rupees.

RULE12 COLLECTION OF TAXES BY DEALERS.-

(1) A registered dealer who is liable to pay tax under the Act, other than a dealer who has been permitted to pay any amount by way of composition under sub-section (i) or (4) of section 17, may collect amounts by way of tax or taxes under the Act, subject to the following conditions :-

(i) He shall not collect any amount or amounts by way of tax or taxes under the Act at a rate or rates exceeding the rate or rates specified in sections 5, 5B, or 5C or sub-section (6) of section 17 or ( in Second, Third, Fourth, Sixth, Seventh or Eighth Schedules

(ii) Omitted

(2) The registering authority or the assessing authority, as the case may be, may at any time, call for and examine the accounts of any registered dealer for the purpose of satisfying himself that the dealer has not collected any amount by way of tax purporting to be by way of tax in contravention of sub-section (1) or sub-section (2) of section 18.]

(3) Omitted RULE 12-A SECURITY TO BE FURNISHED BY CERTAIN DEALERS.-

(1) Where an assessing authority or the registering authority, as the case may be, is of the opinion that a dealer who has been registered or has applied for registration or for renewal of registration should furnish security or additional security for the proper payment of tax payable by him, the said authority may direct him in writing, to furnish within such time as may be specified by such authority, security for an amount not exceeding the limits prescribed in clause (b) of sub-section (4) of section

10A. For purpose of determining the amount of security, the assessing authority or the registering authority, as the case may be, shall take into account, the taxable turnover of the dealer, if any, at the time of such determination, the nature of the goods dealt with by him and such other factors as may in the opinion of the said authority assist it in making a proper determination.

(2) Such security may be furnished by the dealer in any of the following ways namely, -

(a) by depositing as security in the government treasury the amount fixed by the said authority; or

(b) by depositing with the said authority, government securities for the amount fixed by the said authority; or

(c) by depositing security amount in the post office savings bank and pledging the pass book to and depositing it with the said authority; or

(d)by furnishing to the said authority a guarantee from [a scheduled bank as defined in the Reserve Bank of India, Act, 1934 agreeing to pay the State Government on demand, the amount of security fixed by the said authority.

(3) The security furnished may in the event of default of payment of any tax, penalty or other amount due be adjusted towards such [ tax, penalty or other amount. The assessing authority or the registering authority, as the case may be, may in any case where such adjustment has been made, demand fresh security or additional security to make up the amount adjusted towards the tax, penalty or other amount.]

RULE 13 Form of Return.-

(1) The return to be submitted under section 12 or section 12-C shall be in Form 4 and the return to be submitted under section 25-B shall be in Form 4-B.

(2) Where a dealer deals in goods liable to different rates of tax under the Act, the return submitted shall specify the total taxable turnover separately in respect of each such class of goods.]

(3) Omitted

(4) Omitted RULE 13-A STATEMENT TO BE SUBMITTED BY AUTHORITIES DEDUCTING TAX AT SOURCE.-

(1) The statement under sub-section (2) of section 19A or sub-section (2) of Section 19-AA shall be in Form 50B The tax deducting authority shall deduct the tax amount and remit to the Government Treasury under the Sales Tax Head of Account or pay by a cheque or a demand draft drawn in four of its assessing authority, if the tax deducting authority is a registered dealer or to the Assistant Commissioner of Commercial Taxes of the area in other cases, so as to reach such authority within twenty days after the close of the month along with the statement required to be filed under Section 19-A or Section 19-AA, in duplicate, enclosing the treasury challan in original or a cheque or a demand draft.

(2) Where the amount remitted to the government treasury for any month or months is less than the amount of tax deducted at source for that month or months or where in consequence of default in complying with provisions of sub-section (2) of section 19A, the amount payable for any month or months is determined to the best of judgment, the assessing authority or the assessing authority of the area, as the case may be, shall serve upon the concerned authority a notice in Form 5 and the said authority shall pay the sum demanded in the said notice within the time and in the manner specified in the notice.

(3)Where the payment for the purchases referred to in Section 19-AA is made by means of presenting the bill to the Government Treasury, the Drawing Officer shall be responsible for the deduction of the due amount of tax from the bill. The deduction so made shall be transferred to the Head of Account mentioned in the challan enclosed to the bill. For this purpose, the Drawing and Disbursing, Officer shall enclose a challan in Form 33-A in triplicate. The copies marked “ original ‘’ and “ duplicate’’ shall be returned to the Drawing Officer by the District and Sub-Treasury duly receipted as proof of payments of which the copy marked “duplicate’’ shall be enclosed to the statement in Form 50-B to be submitted to the Assessing Authority or the Assistant Commissioner of Commercial Taxes of the area, as the case may be.]

RULE 13-B Non-deduction of tax at source- conditions to apply.-

(1)An assessee executing works contract for any of the authorities mentioned in sub-section (1) of Section 19-A may make an application to the Commissioner of Commercial Taxes seeking exemption from deduction of tax by such authorities in respect of the works contracts executed for them subject to the following conditions, namely.-

(i) The Assessees is a registered dealer for a period of not less than three years;

(ii) The assesse is not in arrears of any tax or other amount due under the Act as on the date of application;

(iii) The assessee is not a non-resident dealer;

(iv) Assessee’s total turnover as declared in the annual return of turnover during the immediately preceding year is not less than five hundred lakh rupees;

(v) The tax liable to be paid during the year is less than the tax liable to be deducted under clause (b) of sub-section (1) of Section 19-A during that year by more than twenty-five per cent; or

(vi) x x x x x;]

(vii) The application shall be made within ninety from the date of commencement of the year or of the works contract if he has commenced the works contract during the course of the year.]

RULE 14 Omitted RULE 15 Omitted RULE 16 Omitted RULE 17 [Payment of tax in advance, reimbursement of excess tax paid on industrial inputs,etc.,-]

(1) The statement under sub-section (1) of section 12-B shall be in Form 3 and the return under sub-section (2) of section 25-B shall be in Form 3B and shall be sent in duplicate to the assessing authority [ or the registering authority, as the case may be,] so as to reach it within twenty days after the close of the month to which such statement or return relates. Such statement or return shall be accompanied by a receipt from a government treasury, a crossed postal order, a crossed cheque or a crossed demand draft in favour of the assessing authority or the registering authority, as the case may be, and encashable at a post office/bank situated in the place of location of the office of the assessing authority or the registering authority, as the case may be, or of the principal place of business of the dealer in Karnataka for the full amount of tax payable by him on the basis of his actual taxable turnover during the month to which the statements or returnrelates.]

[ Provided that the statement to be submitted for the month of Apri.2001 shall be in Form 3 as substituted by the Karnataka Sales Tax (Amendment) Rules, 2001.]

(2) [Omitted ] [ A notice of demand under sub-section (3) of Section 12-B shall be in Form 5.]

(3) [Omitted

(4) Omitted

(5) Omitted] RULE 17-A RETURN AND ASSESSMENT OF CERTAIN CASUAL TRADERS.-

(1) Every casual trader referred to in clause (b) or sub-section (5) of section 5 shall within twentyfour hours of his arrival in the area under the jurisdiction of the assessing authority concerned, intimate to such assessing authority, his name, address and residence in the State, if he is a resident of the State or his name and address in the State as well as his address outside the State, if he is a non-resident, the nature of the goods in which he intends to deal and the period within which he intends to deal and the period within which he intends to leave the area under the jurisdiction of the said authority.

(2) The casual trader shall submit to the assessing authority concerned on or before the tenth of every month a return in Form 4 or in Form 4B, as the case may be, in duplicate showing the total turnover and taxable turnover for the preceding months, the amount or amounts actually collected by way of tax or taxes during that month and the amounts of tax due on the taxable turnover during that month. Along with the return he shall submit a receipt from a government treasury or a crossed cheque or a demand draft in favour of the assessing authority for the full amount of the tax or taxes payable on the taxable turnover for the month to which the return relates. The casual trader may, if he so desires, pay to assessing authority in cash the tax due, and obtain a receipt therefor.

(3) (i) Where a casual trader stops his occasional transactions during the course of a month, he shall submit to the assessing authority concerned a return in Form 4 or in Form 4B, as the case may be, in duplicate showing the total turnover and taxable turnover up to the stoppage of such transactions within the jurisdiction of the said authority within seven days of the completion of the last transaction.

Along with the return he shall produce proof before the said authority of having paid the tax due, in the manner specified in sub-rule (2).

(ii) Where a casual trader conducts occasional transaction or transactions of a business nature in the area under the jurisdiction of an assessing authority and leaves such jurisdiction, he shall before leaving and immediately following the closure of the said transaction submit to the assessing authority concerned a return in Form 4 or in Form 4B as the may be, in duplicate in the manner prescribed in sub-rule(2)

(4) (i) If on receipt of the return under this rule, the assessing authority is satisfied that the return submitted is correct and complete, the said authority shall assess the casual trader on the basis of the return and determine in Form 6 for the payment of the tax, if any, payable by him in addition to the amount already paid. The casual trader shall thereupon pay the amount within the time and in the manner specified therein.

(ii) If no return is submitted or if the return submitted to the assessing authority to be incorrect or incomplete, he shall assess the casual trader to the best of his judgment after giving him an opportunity of being heard and also to prove the correctness or completeness of the return submitted by him following the procedure prescribed in sub-rule (3) of Rule 18 and issue a notice of demand in Form 6 for payment of tax, if any, payable by him. The casual trader shall pay the amount specified in the notice within the time and in the manner specified therein.]

RULE 18 ANNUAL RETURN AND FINAL ASSESSMENT.-

(1) (a) Every dealer liable to submit a return under section 12 or section 25-B shall submit the return in Form 4 or Form 4B, as the case may be, in duplicate to the assessing authority or the registering authority, as the case may be, so as to reach it within sixty days after the close of the year to which the return relates, showing the actual total and taxable turnovers for that year and the amounts actually collected by him way of tax or purporting to be by way of tax during that year :

PROVIDED that every dealer who discontinues business his during the course of a year, shall submit to the assessing authority, or the registering authority, as the case may be, the return in Form 4 or in Form 4B as the case may be, in duplicate for the period up to and inclusive of the date of discontinuance within fifteen days from the date of such discontinuance.

[Provided further that the return to be submitted for the year ending Thirty-first day of March,2001, shall be in Form 4 as substituted by the Karnataka Sales Tax (Amendment) Rules, 2001 and shall be submitted within the Fourteenth day of June,2001.]

(b) Every dealer who submits a return under clause (a) shall, except when the tax has been paid in advance in full under sub-section (1) of section 12B or sub-section (4) of section 25B, as the case may be, submit along with the return a receipt from government treasury, crossed postal, order, crossed cheque or crossed demand draft in favour of the assessing authority or the registering authority, as the case may be, for the full amount of tax payable for the year on the basis of the return, after deducting therefrom the advance taxes, if any, already paid for the year.

(c) If the full amount of tax payable under clause (b) is not paid along with the return, the assessing authority or the registering authority, as the case may be, shall serve upon the dealer a notice in Form 3A and the dealer shall pay the amount demanded in the said notice, i.e. amount of tax not paid and penalty under section (2) of section 13, within the time and in the manner specified in the notice.

(2) On receipt of the return in Form 4 or Form 4B as the may be, the assessing authority or the registering authority, as the case may be, shall, if it is satisfied after such scrutiny of accounts and such enquiry as it considers necessary, that the return is correct and complete, finally assess on the basis of the return, the tax payable under the Act for the preceding year or for the part of the year to which return relates, as the case may be.

(3) Before making the assessment to the best of his judgment under sub-section (3) of sub-section 12, the assessing authority or the registering authority, as the case may be, shall -

(i) if no return is submitted by the dealer, issue a notice in Form 31;

(ii) if the return submitted by the dealer appears to the assessing authority, as the case may be, to be incorrect or incomplete, issue a notice in Form 31A.

(4) Omitted RULE 18-A ASSESSMENT OF CERTAIN PERSONS.-

(1) Where a driver or person-in-charge of the goods vehicle does not comply with subsection of section 28AA, the owner of such vehicle shall be assessed to tax on the value of the goods carried thereby at the rates applicable to such goods under the provisions of the Act.

(2) Before making the assessment under section 28AA, the owner of the vehicle shall be given a reasonable opportunity of showing cause against such assessment.

(3) When making the assessment under section 28AA, the owner of the vehicle may also be directed to pay, in addition to the tax assessed, the penalty levied under sub-section (5) of section 28-AA.

(4) The tax and penalty levied under section 28AA, shall be recovered upon service of a notice in Form 6 and the owner of the vehicle shall pay the same demanded within the time and in the manner specified in the notice.

(5) The authority, for the purpose of sub-section (4) of section 28AA and this rule, shall be the officer-in charge of the first checkpost or barrier or any other officer empowered to issue the transit pass under sub-section (1) of said section;

RULE 18-AA Consent for summary assessment- Omitted .- RULE 18-B SUBMISSION OF RETURN BY GOVERNMENT DEPARTMENT, ETC.-

(1) Every department of a government, statutory body or a local authority except when they buy, sell, supply or distribute goods liable to pay tax under this Act shall submit a return in Form 4 showing the total and taxable turnover for each quarter and the amount or amounts actually collected by it by way of tax or taxes during that quarter.The return duly filled and signed by the officer authorised by the head of the department, the statutory body or the local authority shall be submitted so as reach the assessing authority of the area of the rank of an Assistant Commissioner of Commercial Taxes having jurisdiction over the place of business on or before the 20th day of the month succeeding the quarter to which such return relates. Along with the return, it shall also submit proof of payment as specified in sub-rule (1) of rule 17 for the full amount of the tax or taxes payable under any of the sections under the Act for the quarter to which the return relates. If the amount of tax collected by the department, statutory body or the local authority is not remitted alone with the return and if no proof of payment is enclosed to the return, the assessing authority concerned shall demand and recover the amount, due from the government department, statutory body or the local authority concerned.

(2) The return so submitted shall be provisionally accepted. The assessing authority shall, as may be, after the receipt of the return, inspect the accounts of the department, statutory body or local authority and verify the correctness of the return, rates of taxes charged and the amount collected by way of taxes. If the return or the rates of taxes charge and the amount collected by way of tax are found to be incorrect, he shall intimate in writing the correct rate applicable and the amount of tax to be collected by the department, statutory body or the local authority concerned. They shall thereafter rectify the mistake and collect and remit the correct taxes due underthe Act and intimate the fact to the assessing authority together with the proof of remittance of such tax.

RULE 19 Omitted RULE 20 ADJUSTMENT AFTER FINAL ASSESSMENT.- After making the final assessment under sub-rule (2) or (3) of rule 18, the assessing authority shall examine where any, and if so, what amount is due from the dealer towards it after deducting any tax already paid in advance under section 12B or sub-section (3) of section 25B and the amount of tax, if any, paid under clause (b) of sub-rule (1) of rule 18. If any amount is found to be due from the dealer towards the final assessment, the assessing authority shall serve upon the dealer a notice in Form 6 and the dealer shall pay the sum demanded within the time and in manner specified in the notice. If the tax due on the final assessment is lower than the tax already paid it shall serve upon the dealer a notice in Form 7 along with a refund payment order in Form 24 a refund adjustment order in Form 25 or both, as the case may be. If the final assessment is exactly equal to the tax already paid the assessing authority shall inform the dealer what the final assessment is and that no further amount is due from him towards it :

PROVIDED that excess tax the refundable to the dealer may be adjusted towards other amount, if any, due by him under the Act.

RULE 20-A FOR GRANT OF PERMISSION TO PAY FINALLY ASSESSED TAX IN INSTALMENTS.-

(1) An assessee may apply in Form 6A to one of the authorities provided in sub-rule (2), within the time limit mentioned in sub-rule (3) and subject to conditions specified in sub-rule (4), for grant of permission to pay the finally assessed tax in instalments in accordance with the provisions of this rule.

(2) The authorities referred to in sub-rule (1) shall be the following, namely, -

(i) the Government in all case where to the sum in relation to which instalments are sought exceeds rupees twenty five lakhs or where the period within which the sum is sought to be paid exceeds 24 months;

(ii) the Commissioner, where the sum in relation to which instalments are sought is rupees twenty five lakhs or less and the period within which the sum is sought to be paid does not exceed 24 months.

(3) The time-limit referred to in sub-rule (1) shall be within twenty one days from the date of service of demand notice in Form 6 :

PROVIDED that the authority empowered under sub-rule (2) may relax the above time limit in cases where adequate justification is furnished by the assessee in respect of the delay involved.

[Provided further that the assesse shall be liable to pay interest on the finally assessed tax due at the rate specified under sub-section (2) of Section 13 during such period of delay involved and the sum for which instalments are sought shall be deemed to include interest so payable.]

(4) The conditions referred to in sub-rule (1) shall be the following, namely, -

(i) the assessee is unable to pay the sum for which instalment facility is sought, for reason beyond his control;

(ii) the assessee is not due to pay any tax or other amount due under the Act, except the sum for which instalments are sought on the date of making the application under sub-rule (1);

(iii) the assessee furnishes adequate security to the satisfaction of the assessing authority concerned for the recovery of the sums in relation to which instalments are sought;

(iv) the assessee pays along with each instalment, and in addition to the sums permitted to be paid in instalments, interest at the rate of twentyfour per cent per annum, on the sums remaining unpaid from time to time; and

(v) the assessee furnishes declaration that no application under this rule has been made to any other authority specified in sub-rule (2) in relation to the sum for which instalments are sought under sub-rule (1).

(5) The authority to whom an application has been made under this rule, may at its discretion, and after making such enquiry, if any, as deemed necessary, by an order in writing, and subject to the limits specified in sub-rule (2) permit an assessee to pay the tax or other sum due for which the application under sub-rule (1) is made in such instalments, at such intervals and subject to such conditions as may be specified in its order.

(6) If any condition mentioned in sub-rule (4) is contravened or a default is made in making payments in accordance with the order passed under sub-rule (5), -

(i) the whole of the sum remaining unpaid on the date of such default shall become recoverable at once in a lump sum together with the penalties, if any, in accordance with the provisions of the Act;

(ii) penalty accruing under sub-rule (2) of section 13 of the Act shall not be waived under any circumstances.

RULE 20-B DISBURSEMENT OF AMOUNT WRONGLY COLLECTED AS TAX.-

(1)(a) The application to be submitted under section 18AA shall be in Form 51.

(b) The person claiming refund shall enclose to the application copies of the sales bills or invoices duly certified by the dealer in respect of whom the order of forfeiture under section 18AA is passed and an authenticated copy of the order of forfeiture so passed.

(2) If the claim of refund of amount relates to collection of tax by more than one dealer, separate applications in respect of each of such dealer shall be made.

(3) On receipt of the application, if the Commissioner is satisfied after scrutiny of the sales bills or invoices and after holding such inquiry as he considers necessary, that the claim of refund is valid and admissible, he shall pass orders for refund of the amount or any part thereof.

RULE 20-C Procedure and conditions for granting deferred payment of tax or exemption of tax for new industry.-

(1) Where a new industrial unit referred to in Section 19-C is eligible for specified tax incentive with reference to the investment made in fixed assets, the extent of such incentive shall be arrived at, on the basis of the following.-

(a) Aggregate amount of tax including all additional levies, if any, which would have become leviable on the eligible new industrial l unit’s purchases and sales under Karnataka Sales Tax Act, 1957;

(b) Aggregate amount of Central Sales Tax which would have become leviable on inter- State sales;

(c) Aggregate amount of tax at the rate of four per cent or the rate applicable under the Karnataka Sales Tax Act, 1957m whichever is lower on the sale price of the goods transported by the eligible new industrial unit to its own place of business or to the place of business of its agent at any place within India but outside the State of Karnataka for sale there.

(2) (a) Where the Government has permitted an eligible industrial unit for sales tax deferral under the package of incentives and concessions offered to such new industrial unit from time to time in the relevant Government orders and such unit has exercised its option to defer payment of tax payable on sale of goods manufactured by such industrial unit in accordance with monthly or quarterly statements, permission to such deferment of taxes shall be subject to the following conditions.-

(i) such deferment shall be permitted only to that eligible industrial unit as certified by the Director of Industries and Commerce or his nominee, which has filed monthly or quarterly returns;

(ii) Such deferment shall be restricted to the tax payable on the sale of goods manufactured by such industrial units;

(iii) Such deferment shall be restricted for the period to which such industrial unit is certified to be eligible for sales tax deferral as specified in relevant Government Order;

(iv) The amount of tax to be deferred shall be restricted to such amounts as specified in the relevant Government Order;

(v) Where an eligible industrial unit undertakes investment in expansion or modernisation, the amount of tax to be deferred shall be the difference between the total tax liability under the Karnataka Sales Tax Act, 1957 together with the tax liability under the Central Sales Tax Act, 1956 and the average total tax liability of the three years immediately preceding the year in which commencement of commercial production following such investment in expansion or modernisation has taken place;

(vi) The Assessing Authority shall be at liberty to verify and determine the eligibility of any certificate or claims relating to the tax concession, in exercise of its statutory powers;

(b) The payment of such tax according to the assessment order in respect of the period specified in sub-clause (iii) of clause (a) or such tax payable according to the order, if any, that may have been passed under Section 12-A, 12-AA, 20,21,22,22-A,23,24 or 25-A in respect of the said assessment, as the case may be, shall be deferred subject to the conditions in clause (a);

(c) The Joint Commissioner of Commercial Taxes of the area shall issue a “Certificate of Entitlement” for availing the benefit of deferment of tax payable by an industrial unit.

(d) The amount of tax so deferred shall be paid by the industrial unit after the expiry of deferred period in such instalments as specified in Certificate of Entitlement.

(e) The tax which is deferred under the provisions of this rule shall be immediately recoverable at any time prior to the expiry of the period of deferment, if the unit contravenes any of the provisions of the relevant Government Order or the conditions of Certificate of Entitlement or the Certificate of Entitlement being cancelled or revoked by the issuing authority.

(3) (a) Where an eligible industrial unit has been granted a Certificate of Eligibility by the Director of Industries and Commerce for sales tax exemption under the package of incentives and concessions offered to such new industrial unit from time to time in the relevant notification under Section 8-A or Section 19-C and such unit has exercised its option for exemption of tax payable on sale of goods manufactured by such indus