10 : Levy of Purchase tax

(1) Every dealer who in the course of his business purchases any goods specified in Schedule II

from any person other than a registered dealer or from a registered dealer who has opted for

composition of tax under section 11 20or from a registered dealer in the circumstances in which

no tax under Section 9 is payable by the registered dealer on the sale price of such goods20,

shall be liable to pay tax on the purchase price of such goods if after their purchase, -

(a) the goods other than those specified in part III of the said Schedule, are not sold

within the State of Madhya Pradesh or in the course of inter-state trade or

commerce or in the course of export out of the territory of India but are sold or

disposed of otherwise; or

3/4 (b) the goods other than those specified in part III of the said Schedule, are consumed

or used,-

(i) in the manufacture or processing of goods declared tax free under section 16

and the manufactured or processed goods are disposed of otherwise

than by way of sale in the course of export out of the territory of India; or

(ii) as plant, machinery, equipment and parts thereof in generation, transmission

or distribution of electrical energy ; or3/4

(c) the goods other than those specified in part III of the said Schedule, after

consumption or use in the manufacture or processing or mining of any goods

specified in Schedule II, the manufactured or processed or mined goods are

disposed off otherwise than by way of sale within the State of Madhya Pradesh or in

the course of inter-state trade or commerce or in the course of export out of the

territory of India ; or

(d) the goods specified in part III of the said Schedule, are not sold within the State of

Madhya Pradesh or in the course of inter-state trade or commerce or in the course

of export out of the territory of India but are sold or disposed of otherwise; or

(e) the goods specified in part III of the said Schedule, are consumed or used in the

manufacture or processing or mining of goods ;

and such tax shall be levied, -

(i) in respect of goods referred to in clauses (a), (b) and (c), at the rate of 4

percent or the rate specified in column (3) of Schedule II, whichever is lower;

and

(ii) in respect of goods referred to in clauses (d) and (e),at the rate specified in

column (3) of Schedule II.

Explanation - The rate specified in Schedule II shall be the rate at which tax would have

been levied on the sales of such goods within the State of Madhya Pradesh on the date of

such purchase. 2

(2) No tax under this section shall be levied in respect of any year on -

(a) a dealer whose turnover in a year does not exceed the limit prescribed under subsection

(1) of section 5,

(b) any other dealer who has no turnover, if his aggregate of purchase prices of all the

goods does not exceed such amount as may be prescribed.

(3) Every dealer who has no turnover and is liable to pay tax under sub-section (1) shall,

for the purpose of Sections 18,20,21, 24,25 and 39, be deemed to be a registered dealer