Indian Income Tax
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Liability to tax: Every person who is registered or is liable to be registered under the provisions of this Act shall be a taxable person and liable to pay tax in the manner provided in the Act. Liability to pay tax commences from the date he becomes so liable. Liability for registration is subject to liability pay tax, that is, if the aggregate of his turnover of sales of all goods directly or through agent, branch or depot and whether the sale is inside the State, in the course of inter-state trade or commerce or export out of the territory of India or consignment out side the State is not less than two lacs in the case of manufactures of traders and one lac each in case of works contract or transfer of right to use goods. These are the limits of taxable quantum.

Specific provisions have been made in the Act as to the date from which a person shall be liable to pay tax to cater to the various situations on the commencement of the Act, such as:

  1. If a dealer has been carrying on business in the immediately preceding assessment year and continues it on the date of the commencement of the Act,
  2. If he commences business in the year of the commencement of the Act,
  3. If a dealer commences business in the year of the commencement of the Act on first day or any other subsequent date but before the date of the commencement of the Act,
  4. If a dealer commences business on or after the date of commencement of the Act either in the year of commencement of in any subsequent assessment year, etc. Levy of tax:- Tax shall be levied at every point of sale in the State except Special Category Goods, that is, petrol, diesel, ATF and natural gas on which tax shall be levied at the point of sale by the importer or manufacturer. Besides, provision has been made to levy tax on purchase price of the goods if (I) the goods are purchased from a registered dealer in the circumstances in which on tax under this Act is payable by that registered dealer on the sale price of such goods, or (II) from a dealer other than a registered dealer and tax on sale of such goods cannot be levied on the seller either in view of any provision of this Act or because the selling dealer though liable to pay tax, has not deposited tax due on such sale.

    In case of exporters provision has been made that their sale turnover shall be zero rated and they will be entitled to a refund of tax paid on purchases of goods so exported. Levy of Presumptive Tax:- Provision has been made for levy of Presumptive Tax on certain registered dealers whose gross turnover of sales in an assessment year does not exceed rupees five lacs (in lieu of the normal tax under the provisions of the Act) at such percentage of tax on the entire taxable turnover as the government may notify. Certain conditions and restrictions have been imposed with respect to this provision, such as, the dealer shall not be entitled to charge or collect any tax on such sales and shall not be entitled to any input tax credit on his purchases. Further, this provision shall not apply to a registered dealer who is an importer or a manufacturer or who imports goods from or exports goods out side the territory of India.

Composition of tax liability: Provision has been made to accept a composition money either in lump sum or at an agreed rate from a dealer in lieu of tax that may be payable by him in respect of such goods or class of goods and for such period as may be agreed upon with the restrictions that this scheme will not apply to registered dealer who imports goods inside or exports goods outside the territory of India or whose gross turnover in an assessment year exceeds rupees fifteen lacs also, such dealer shall not realize tax on sale of goods and no input tax credit shall be allowed on his purchases. Under this scheme dealers making sale of goods by way of transfer of property in goods involved in a works contract and dealers who make sale of goods by way of transfer of right to use any goods have been included.


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