YOGESH KANSAL AND COMPANY

1. (1) This Act may be called the Gujarat Value Added Tax Act, 2003.

(2) It extends to the whole of the State of Gujarat.

(3) This section shall come into force at once and the remaining provisions of this Act shall come into force on such date as the State

Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions.

2.Definitions.

2. In this Act, unless the context otherwise requires,-

(1) “agriculture” with all its grammatical variations and cognate expressions includes floriculture, horticulture, the raising of crops,

grass or garden produce, and grazing; but does not include dairy farming, poultry farming, stock breeding or the mere cutting of wood or

grass or gathering of fruits;

(2) “agriculturist” means a person who cultivates land personally for the

purpose of agriculture;

(3) “appointed day” means the 1st day of April, 2003;

(4) “business” includes –

(i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make profit or gain and whether or not any profit or gain accrues from such trade, commerce, manufacture, adventure or concern; and

(ii) any transaction of buying, selling or supplying plant, machinery, raw materials, processing materials, packing materials, empties, consumable stores, waste products, or such other goods, or waste or scrap of any of them which is ancillary or incidental to or resulting from such trade, commerce, manufacture, adventure or concern;

(5) “capital goods” means plant and machinery meant for use in manufacture and such other goods, as may be notified by the State

Government from time to time in the official gazette;

(6) “Central Act” means the Central Sales Tax Act, 1956;

(7) “commission agent” means a dealer who bonafide buys or sells, for an agreed commission, any goods on behalf of principals;

(8) “Commissioner ” means the person appointed to be the Commissioner of Commercial Tax for the purposes of this Act.

(9) (a) “to cultivate” means to carry on any agricultural operation; and

(b) “to cultivate personally” means to cultivate on one’s own account -

(i) by one’s own labour, or

(ii) by the labour of one’s own family, or

(iii) by servants on wages payable in cash or kind (but not in crop share), or by hired labour under one’s personal supervision or the personal supervision of any member of one’s family.

Explanation I.-- A widow or a minor or a person who is subject to any physical or mental disability, shall be deemed to cultivate land personally if it is cultivated by her or his servants or by hired labour.

Explanation II.-- In the case of a Hindu Undivided Family, land shall be deemed to be cultivated personally if it is cultivated by any member of such family;

(10) “dealer” means any person who, for the purpose of or consequential to his engagement in or, in connection with or incidental to or in the course of his business buys, sells, manufactures, makes supplies or distributes goods, directly or otherwise, whether for cash or deferred payment, or for commission, remuneration or otherwise and includes,-

(a) the Central Government or a State Government or any local authority such as municipality or municipal corporation or panchayat, a statutory authority, a company, a partnership firm, a Hindu Undivided Family or any society, club, association or body, incorporated or not, of persons which carries on business;

(b) a casual dealer, that is to say, a person who whether as principal, agent or in any other capacity, undertakes occasional transaction of a business nature in any exhibition-cum-sale or auction or otherwise in the State, whether for cash, deferred payment, commission, remuneration or other valuable consideration;

(c) an auctioneer, who sells or auctions goods belonging to any principal whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of principal;

(d) a factor, broker, commission agent, del credere agent or an auctioneer or any mercantile agent, by whatever name called, who carries on business on behalf of any principal whether disclosed or not;

(e) any person who transfers, otherwise than in pursuance of a contract, property in any goods for cash, deferred payment or other valuable consideration;

(f) any person who transfers property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(g) any person who delivers goods on hire purchase or any system of payment by installments;

(h) any person who transfers the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; and

(i) any person who supplies, by way of or as part of any service or in any other manner whatsoever, goods being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration.

Explanation.-- (i) A society (including a co-operative society), club or firm or an association, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, from or to its members or other persons for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act.

(ii) The Central Government or a State Government or a local authority or railway administration or port trusts or a statutory body, which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise, for cash, deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act.

(iii) Any person or body, which disposes of any goods including unclaimed, confiscated, unserviceable, scrap, surplus, old, obsolete, discarded, waste or surplus product or goods, whether by auction or otherwise, directly or through an agent, for cash deferred payment, commission, remuneration or other valuable consideration, shall be deemed to be dealer for the purposes of this Act.

Exceptions.-- The following shall not be deemed to be a dealer within the meaning of this clause, namely:-

(i) an agriculturist who sells exclusively agricultural produce grown on land cultivated by him personally;

(ii) an individual who sells exclusively any fish or any sea-food caught by him personally or by any member of his family on account of or on behalf of such individual; and

(iii) a charitable, religious or educational institution, carrying on the activity of manufacturing, buying, selling or supplying goods, in performance of its functions, for achieving its avowed objects, which are not in the nature of business.

(11) “declared goods” means goods declared to be of special importance in inter-State trade or commerce under section 14 of the Central Act;

(12) “earlier law” means the Gujarat Sales Tax Act, 1969 and the Gujarat Purchase Tax on Sugarcane Act, 1989 as amended from time to time and enactments which have validated anything done or omitted to be done under the aforesaid Acts;

(13) “goods” means all kinds of movable property (other than newspapers, actionable claims, electricity, stocks and shares and securities) and includes live stocks, all materials, articles and commodities and every kind of property (whether as goods or in some other form) involved in the execution of works contract, all intangible commodities and growing crops, grass, standing timber or things attached to or forming part of the land, which are agreed to be severed before sale or under the contract of sale;

(14) “manufacture” with its grammatical variations and cognate expressions means includes producing, making, extracting, collecting,

altering, ornamenting, finishing, assembling or otherwise processing, treating or adapting any goods; but does not include such manufactures or manufacturing processes as may be prescribed;

(15) “person” includes an individual, a joint family or Hindu Undivided Family, a company, a firm, an association of persons or body of individuals, whether incorporated or not, a society, club or other institution, a local authority, the Central Government or a State Government and every artificial juridical person not falling within any of the preceding descriptions;

(16) “place of business” means any place where a dealer carries on business and includes,--

(a) a warehouse, godown or other place where a dealer stores or processes his goods;

(b) any place where a dealer produces or manufactures goods;

(d) any vehicle or vessel or any other carrier wherein the goods are stored or used for transporting the goods;

(e) any place of business of an agent by whatever name called through whom a dealer carries on business;

(17) “prescribed ” means prescribed by rules;

(18) “purchase price“ means the amount of valuable consideration paid or payable by a person for any purchase made including the amount of duties levied or leviable under the Central Excise Tariff Act, 1985 or the Customs Act, 1962 and any sum charged for anything done by the seller in respect of the goods at the time of or before delivery thereof, other than the cost of insurance for transit or of installation, when such cost is separately charged and includes, -

(a) in relation to –

(i) the transfer, otherwise than in pursuance of a contract of property in any goods,

(ii) the supply of goods by any unincorporated association or body of persons to a member thereof,

(iii) the supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating),

the amount of cash, deferred payment or other valuable consideration paid or payable therefor,

(b) in relation to the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, such amount as is arrived at by deducting from the amount of valuable consideration paid or payable by a person for the execution of such

works contract, the amount representing labour charges for such execution,

(c) in relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable by a person for such delivery;

(19) “raw materials” means goods used as ingredient in the manufacture of other goods and includes processing materials, consumable stores and material used in the packing of the goods so manufactured but does not include fuels for the purpose of generation of electricity;

(20) “registered dealer“ means a dealer registered under the provisions of this Act, who holds a certificate of registration granted or deemed to have been granted under this Act;

(21) “resale” means a sale of purchased goods,-

(i) in the same form in which they were purchased; or

(ii) without using them in the manufacture of any goods or without doing anything to them which amounts to or results in, a manufacture;

and the word “resell” shall be construed accordingly;

(22) “rules” means the rules made under this Act;

(23) “sale” means a sale of goods made within the State for cash or deferred payment or other valuable consideration and includes,-

(a) transfer, otherwise than in pursuance of a contract, of property in goods for cash, deferred payment or other valuable consideration,

(b) transfer of property in goods (whether as goods or in some other form) involved in execution of a works contract,

(d) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration,

(e) supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration,

(f) supply of goods by a society or club or an association to its members on payment of a price or of fees or subscription or

any consideration,

(g) supply of goods by way of or as part of any service or in any other manner whatsoever, of

(h) supply of goods being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration,

(i) supply by way of barter of goods,

(j) disposal of goods by a person in the manner prescribed in Explanation (iii) to clause 10 but does not include a mortgage, hypothecation, charge or pledge; and the words “sell”, “buy” and “purchase” with all their grammatical variations and cognate expressions shall be construed accordingly.

Explanation.- (i) - For the purposes of this clause, “sale within the State” includes a sale determined to be inside the State in accordance with the principles formulated in sub-section (2) of section 4 of the Central Act;

(ii) for the purpose of sub-clause (b) of the expression “works contract” means a contract for execution of works and includes such works contract as the State Government may, by notification in the Official Gazette, specify;

(iii) every transfer of property in goods by the Central Government, any State Government, a statutory body or a local authority for cash, deferred payment or other valuable consideration, whether or not in the course of business, shall be deemed to be a sale for the purposes of this Act;

(24) “sale price” means the amount of valuable consideration paid or payable to a dealer or received or receivable by a dealer for any sale

of goods made including the amount of duties levied or leviable under the Central Excise Tariff Act, 1985 or the Customs Act, 1962 and any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof, and includes, -

(a) in relation to –

(i) the transfer, otherwise than in pursuance of a contract, of property in any goods,

(ii) the transfer of the right to use any goods for any purpose, whether or not for a specified period,

(iii) the supply of goods by any unincorporated association or body of persons to a member thereof,

(iv) the supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), the amount of cash, deferred payment or other valuable consideration paid or payable therefor;

(c) in relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable to a person for such delivery;

(25) “Schedule” means a Schedule appended to this Act;

(26) “the State” means the State of Gujarat;

(27) “tax” means a tax leviable and payable under this Act on sales or purchase of goods and includes lumpsum tax leviable or payable

under section 14;

(28) “tax period” means a calendar month or a quarter as may be prescribed by the State Government;

(29) “taxable goods” means goods other than those on the sales or purchase of which no tax is payable under section 5;

(30) “taxable turnover” means the turnover of all sales or purchases of a dealer during the prescribed period in any year, which remains after deducting therefrom,-

(a) the turnover of sales not subject to tax under this Act;

(b) the turnover of goods declared exempt under sub-section (1) of section 5 or under a notification under sub-section (2) of section 5, and

(c) in case of turnover of sales in relation to works contract, the charges towards labour, service and other like charges, and subject to such conditions as may be prescribed:

Provided that in the cases where the amount of charges towards labour, service and other like charges in such contract are not ascertainable from the terms and conditions of the contract, the amount of such charges shall be calculated in such manner as may be prescribed;

(31) “Tribunal” means the tribunal constituted under section 19;

(32) “turnover of purchases” means the aggregate of the amounts of purchase price paid or payable by a dealer in respect of any purchase of goods made by him during a given period after deducting the amount of purchase price, if any, refunded to the dealer by the seller in respect of any goods purchased from the seller and returned to him within the prescribed period;

(33) “turnover of sales” means the aggregate of the amount of sale price received or receivable by a dealer in respect of any sale of goods

made during a given period after deducting the amount of sale price, if any, refunded by the dealer to a purchaser, in respect of any goods

purchased and returned by the purchaser within the prescribed period;

(34) “total turnover” means aggregate of the following transactions effected by a dealer:

(a) turnover of sales or purchases of goods within the State whether such sales or purchases of goods are taxable or exempt under this Act;

(b) turnover of sales of goods in the course of inter-State trade or commerce;

(d) turnover of sales by a dealer on his own account and also on behalf of his principal.

(35) “value of goods” means the value as ascertained from the purchase invoices or bills and includes insurance charges, excise duties,

countervailing duties, value added tax, sales tax, transport charges, freight charges and all other charges incidental to the transaction of

the goods:

Provided that where the purchase invoices or bills are not produced or when the goods are acquired or obtained otherwise than

by way of purchase, the value of goods shall be the value at which the goods of like kind or quality are sold or are capable of being sold in

open market;

(36) “year” means –

(i) in relation to any dealer who maintains regular books of accounts, the year by reference to which the accounts are maintained by him; and

(ii) in relation to any other dealer, a financial year :

Provided that a registered dealer shall not be entitled to vary the year by reference to which he maintains his books of accounts, except with the consent of the Commissioner and upon such conditions as the Commissioner may determine.