Uttar Pradesh VAT Rules

Composition of tax liability

1. Notwithstanding anything contained in this Act, the State Government may announce a scheme payment of lump sum in lieu of amount of tax payable in respect of turnover of sale or purchase or both of taxable goods (hereinafter referred to as composition scheme), in the circumstances mentioned hereunder, and the assessing authority subject to provisions of the scheme may agree to accept -
   • a lump sum, based on estimated value addition in trading of any taxable goods, in lieu of amount of difference of tax payable on actual turnover of sale of such goods and amount of input tax credit admissible in respect of purchase of such goods during any assessment year, from any dealer who:
     1. makes retail sales of goods and does not issue tax invoice;
     2. carries on business of purchase and sale of goods in his own account and makes purchase and sale of goods inside the State only;
     3. does not consign any goods outside the State whether by reason of a sale or otherwise;
     4. does not sell any goods brought or received from outside the state;

     and whose aggregate of turnover of sale during the assessment year preceding the assessment year under scheme, has not exceeded rupees twenty five lakh and whose estimated aggregate of turnover of sale, for the assessment year under scheme, is not likely to exceed rupees twenty five lakh.

   • a lump sum in lieu of aggregate of amount of–
     1. tax payable by a brick kiln owner or lessee of brick-kiln on actual turnover of sale of self manufactured bricks, brick-tiles and surakhi or rabish manufactured in such brick-kiln and brick-bats, brick-ballasts, brick-gitti, and brick-rori made out of such bricks or brick-tiles, during the period of composition scheme whether such goods are manufactured prior to or during the period of scheme, in excess of amount of input tax relating to goods used or consumed in manufacture of such goods as are manufactured and sold during the period under scheme;
     2. tax payable on turnover of purchase of taxable goods from persons other than registered dealers where such goods, purchased during the period of composition scheme, are used, consumed or utilized in manufacture of goods referred to in sub-clause (i) and such manufactured goods are sold during the period under scheme; and
     3. special additional tax payable on turnover of sale of goods referred to in sub-clause (i) during the period under the composition scheme.
   • in respect of the execution of a works contract of civil nature specified under the composition scheme, a lump sum in lieu of aggregate of -
     1. amount of tax payable in respect of purchase of any taxable goods where such goods are purchased from inside the State from a person in the circumstances mentioned in sub-section (4) of section 3 and are incorporated in such works contract;
     2. amount of tax payable on the turnover of sale of any taxable goods where such goods are purchased from inside the State and are incorporated in such works contract;
   • in respect of the execution of a works contract of civil nature specified under the composition scheme, a lump sum amounting to tax computed on turnover of sale of any taxable goods estimated in the manner provided under the scheme and according to rate of tax applicable to sale of such goods where such goods are brought or received from outside the State and are incorporated in the works contract, in lieu of amount of tax payable on the actual turnover of sale of such goods.
   • in respect of dealers or class of dealers, in respect of such goods or class of goods and for such period, as may be specified under the composition scheme, a lump sum in lieu of amount of tax payable by a dealer, on actual turnover of sale of any taxable goods during the period under the scheme, where such dealer makes sale of such goods by way of transfer of right to use goods (whether or not for a specified period) for any purpose,
   • a lump sum in lieu of amount of tax payable by a casual unregistered dealer on actual turnover of sale of any taxable goods or class of such goods sold during such period, as may be specified under the scheme;
   • in case of an unregistered dealer, a lump sum, to be determined in the manner provided under the composition scheme, in lieu of amount of tax payable by such dealer on actual turnover of purchase or sale of any taxable goods where such dealer has been presumed to have made such purchase or sale or both, as the case may be, of such goods under any provision of this Act;
   • a lump sum amounting to tax payable on turnover of sale of any taxable goods estimated in the manner provided under the composition scheme, in lieu of amount of tax payable on actual turnover of sale of such goods where such goods are being brought or received by an unregistered dealer from outside the State for sale.
2. Dealers under clause (a) and clause (e) shall be liable to pay tax in respect of turnover of purchase of taxable goods where such purchase is made from a person other than a registered dealer.
3. A dealer who opts any composition scheme of payment of lump sum under this section shall not be entitled to claim input tax credit in respect of goods sold in the period of the scheme or any goods used or consumed in manufacture of any goods sold in the period of the scheme.
4. A dealer who opts any composition scheme shall not be liable to submit returns of turnover of purchase or sale or both, as the case may be, for such tax periods as are covered under the period of the scheme if lump sum has been accepted in lieu of tax on such turnover.
5. A dealer who opts any composition scheme of payment of lump sum in lieu of amount of tax due on the turnover of sales of any goods shall not realise any amount from the purchasers in the name and colour of tax.
6. A dealer who makes purchase of any goods from a dealer, who has opted any composition scheme, shall not be entitled to claim input tax credit in respect of goods purchased from such dealer.
7. In case of a dealer falling under clause (a) of sub-section (1), if during the assessment year under the composition scheme, aggregate of his turnover of sale exceeds rupees twenty five lakh, the dealer shall be liable to pay tax in accordance with other provisions under this Act, on such exceeded turnover of sale of taxable goods.
8. Except a dealer falling under clause (g) or clause (h) of sub-section (1), every other dealer to whom this section applies, shall furnish such information, as may be prescribed.