Chapter I Chapter I

1. (I) This Regulationmay becalledtheDaman and Diu Value Added Tax Regulation, Short title, 2005. extent and mnmmOBnent

1. (2) It extends to the whole of the Union territory of Daman and Diu. '
2. (3) It shall come into force on such date as the Administrator niay, by nbtification, appoint, and different dates may be appointed for different provisions ofthis Regulation and any reference in any such provision to thecommencement ofthis Regulationshall be construed as a reference to fhe coming intb force ofthat provision. SERTES - I No. : 05 DATED 18*" AUGUST, 2005. . - i Definitions. 2. In this Regulation, unless the context otherwise requir&,-
   • (a) "accountant" means
     • (i) a chartered accountant as defmed in clause (b) of sub-section (I) of '

section 2 of the Chartered Accountants Act,' 1949 and who has obtained a 38 of 1949.

certificate of practice;nder sub-section (I) oflsection 6 of that Act; or ,a . (ir' a person, who, by virtue of the provisions of sub-section (2) of section I 226 ofthe Companies Act, 1956, is entitledto be appointed to act as an auditor I of 1956. . underthat sub-section; or

1. (iir) an auditor appointed in pursuance ofsub-section (2) of section.619 of the Companies Act, 1956; L of 1956. c,, . .
2. (b) "~dmihstrator" heatis the Administrat~r of the union territory of Daman and Diu appointed by he President under article 239 ofthe Constitution; (c)"Appellate~rib~nal"~means theAppcllate?ribunal constituted under section 73; 1. (4 "business" includes -
   • (I) any kade; commerce or man"'facture, . .
   • (ii) a& adveqture or concern in' the nature of trade; commerce or manufacture,. ' I

(iir'j an/ transaction in connection with, & incidental or ancillary to, such

trade, commerce, manufacture, adventurdor concern,

1. (iv) any occasional transaction

continuity or regularity of such transadion, and whether or not such trade, commerce, manufacture, adventure or concern transaction is carried on with a motive to make gain or profit and whether or not any gain or proht accrues from such trade, commerce, manufacture, adventure, concern or aansaction. ~x~la~tiofi-~o~ the purposes of this clause--

1. (A) any transaction of sale or purchase of capital assets pertaining to such trade, commerce, manufacture;adventure, concern or transaction referred to in sub-clauses

1. (1) to (iv) shall be deemed to be business;
   • (B) purchase of any goods, thd price of which is debited in the books of account of the dealer and sale of any goods, the proceeds of which are credited in the books of account of the dealer shall be deemed to, be b~isiness; #
   • (e) "busiliess premises" means- . , (9 the addiess,'of a dealer or, the place at which a dealer carries on the business and which,ls registered as such; rl (ir') any buildi* of place used by a person for carrying on his b~isiness, but does fiat include the building or place used for residential purposes; /

V)."capital goods" means machinery and equipment used in the hade or

manufacturingpf good$; . ' . (g) "cayal trader" means a person who, whether as principal, agent or in any other capacity undertakes occasional transacti6ns in the nature of business involving , ' ,. , buying,selling, supply or distribution ofgoods or condu~ting any exhibitionsum-sale . . . . in Daman and Diu whether for cash, deferred commission, remuneration or otheivaluable c'onsideration:

- SERIES - I -- DATED NTH AUGUST, 2005.

1. (h) "Commissioner" means the Commissioner of value Added Tax appointed under sub-section
   • (I) of section.66;
   • (I) "dealer" means any person who carries on business in Daman and Diu and includes-
   • (I) any person who for the purposes of, or in connection with, or incidental

directly or otherwise, wfiether for cash or for deferred payment or for commission, remuneration or other valuable consideration;

1. (it) any department of the ~entrai~overnment or a State Government, a local authority, Panchayat, Municipality, Development Authority, Cantonment Board and

Government or any of the State Governments or of a local authority, if it buys,

sells, supplies or distributes goods, in the course of activities which may by

notification specified from time to time; . . \9

1. (iir) a factor, commission agent, broker, del credere agent, or any other mercantile agent by whatevernamecalled, who carri'es on the business ofbuying,

selling, supplying or distributing goods on behalf of

any principal, whether . ,\, \ disclosed or not;

1. (iv) an agent of any ofthe persons referred to in sub- clauses (iir) or (vi) or

1. (vir) or (viii) or (ix) of clause (I), whether or not theperson referred to in the said sub-clauses is a dealer , residing . in Daman and Diu;
   • (v) a local branch of a firm or co@any or association of persons, outside

Daman and Diu where such firm, company, association of persons is a dealer

within the meaning of sub-clause (I), or sub-clause (iii), or sub-clause (vr), or sub-clause (vil), or sub-clause (yii~), or sub-clause (ix) of this clause;

1. (vi) a'club, association, society, trust, or co-operative society, whether incorporated or not, which buys goods from, or sells goods to, its members for price, fee or subscription, whether or not in the course'of business; .:.

1. (vir) anauctioneer, who sells or auctions goods belonging to any principal,

whether disclosed or not and

*hether the offer of the intending purc:iaser is accepted by him or by the principal or'a nominee of the principal; (viirj a casual trader; or , ' . .

1. (ir) any person who, for the purposes of, 01 in connection with, or incidental to, or jn'the course of, his business, disposes of any goods as unclaimed or

confiscated, or unserviceable or scrap, surplus, old, obsolete

or.as discarded material or waste ptoducts by way of sale; ,(j) "Daman and Diu" means the Union territory of d am an and Diu;

1. (k) "fair market value" means the value at which goods of like kind and quality are ordinarily sold or would be sold in the same quadties between unrelated parties in the open market at the same time in Daman and Diu; , . .
   • (I) "goods" means every kind of moveable property (other than &wspapers, actionable claims,, stocks, shares and securities) and includes- ,
   • (I) liu&tock., all materials, aeicles or commodities including standiig trees and things attached to or forming part ofthe laid which are agreed to be severed before sale or under a contract of sale; and . .
2. (it) property in goods (whether as goods & in some other form) involved . in the execution of a works contract, lease or hire-purchase or those to be used in the fitting out, improvement or repair of movable property; SERZES - I No. : 05 DATED laTH AUGUST, 2005. -
3. (m) "goods vehicle" means a motor vehicle, vessel, boat, animal and any other form of conveyance used for carrying goods;
4. (n) "Government" means the Administrator;

1. (0) "import" means sale or purchase in the course ofthe import of goods into the territorv of India if the sale or purchase either occasions such import or iseffected by transfe; of document of title ti the goods before the goods have-crossed the customs frotitien of India and includes procurement ofgoods from outside the Daman and Diu either as a result of purchase or otherwise. Expla~~ion-In the case of goods arrivjng in Daman and Diu from a foreign Country through customs, the "import ofthe goods in Daman and Diu" shall occur at the place where the goods are cleared by Customs for home consumption;
   • (p) "in the course of' includes.activities done for the purposes of, in connection with, or incidental to and activities done as part of, the preparation for the activity and in the termination of, the activity;
   • (q) "input tax" in relation to the purchase of goods, means the proportion of the price paid by the buyer for the goods which represents tax under this Regulation; (I.) "net tax'' means the amount calculated for a tax period under section 11 ;
   • (s) "non-creditable goods" means the goods listed in the Sixth Schedule;
     • (I) "notification" meis a notification published in the Official Gazette and the ' expression "notify" shall be construed accordingly;
   • (u) "Official Gazette" means the Daman and Diu ~&tte;
     • (v) "proscribed" means prescribed by ~les made under this Regulation;
   • (w) "registered dealer" means a dealer who has been granted a certificate of registration under section 19;
     • (x) "related person" means a percon who is related to another person (referred to in this definition as a "dealer") if the persob .
     • (i) is a relative of the dealer;
     • (ii) is . a , partnership of which the dealer is a partner;
   • (iit) is a company in whichthe dealer [either alone or alongwith another person who is, or persons who are, related to the dealer under any of the sub- clauses (I), (19, (iv), (vj or (vo of this clause] d'kctly or indirectly holds forty per cent. or more of stock or shares or voting rights;
     • (iv) is a person who [either alone or alongwith another person who is, or other persons who are, related to the person under any of the. sub-clauses (I), (ii), (iv), (v) or (vi) of this clause] directly or indirectly owns forty per cent. or more of outstanding voting stock or shares of the dealer or voting rights;
     • (v) is a company in which forty per cent, or more of outstanding voting stock is held directly or indirectly by a person [either alone or alongwithanother

person who is, or other persons who are, related to the person

under any of the sub-clauses (9, (it), (iv), (v) or (vt) of this clause] who also holds forty per cent. or more of the outstanding voting stock or shares of the dealer; or

1. (vt) is controlled by the dealer, or a person whom the dealer controls, or is a person who is controlled by the same person who controls the dealer;
2. (y) "relative" nieans a relative as defined in clause (41) of section 2 of the Companies Act, 1956; 1 of 1956. SERIES - I No. : 05 DATED laTH AUGUST, 2005. -- - - -

1. (2) "sale", with its grammatical variations and cognate expression, means any transfer ofproperty in goods by one person to another for cash or for deferred payment or for other valuable wnsideration and includes--
   • (i) a transfer of goods on hirepurchase or other system of payment by instalments, but does not include a mortgage or hypothecation of, or a charge, or pledge, on goods;
   • (ii) supply of gwds by a society (including a ca-opeiative society), club, fm, or any association to its members for cash or for deferred payment or for wmmissio~, remuneration or other valuable wnsideration, &&er or not in the course of business;
   • (iil) transfer of property in goods by an auctioneer referred to in sub- clause
     • (vii) of clause (0 of this section, or sale of goods in the course of any other activity in the nature of

banking, insurance which in the course of their

main activity also sells goods possession ofwhich has been taken from borrower or reclaimed;

1. (iv) transfer, otherwise than in pursuance of a contracf of properly in any goods for cash, deferred payment or other valuable consideration;
2. (v) transfer of properly in goods (whether as gwds or in some other form) involved in the execution of a works contract;
3. (vi) transfer of theright to use any goods for any purpose (whether or not for aspecified period) for cash, defened payment or other valuable consideration;
4. (vii) 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 aiy drink (whether or not intoxicating), where such supply or sewice is for cash, deferred payment or other valuable consideration;
5. (viii) every disposal of goods referred to in sub-clause

1. (ir) of clause (0 of this section, and the expressions "sell", "buy" and "purchase", shall, with all their grammatical variations and wgnate expressions, be construed accordingly;
2. (za) "sale price" means the amount paid or payable as valuable consideration for any sale, and includes-
   • (i) the amount of tax, if any, for which the dealer is liable under section 3;
   • (ii) in relation to the transaction, being delivery of goods on hire-purchase or any system of payment by instalments, the amount of valuable wnsideration payable to a person for such delivery including hire-charges, interest and other charges incidental to such transaction;
   • (iii) in relation to transfer of the right to use any goods for any purpose

(whether or not for a specified period), the valuable wnsideration or charges

received or receivable for such transfer;

1. (iv) any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof;
2. (v) the amount of duties levied or leviable on the goods under the Central

Excise Act, 1944 or the Customs Act, 1962, or the

Goa, Daman and Diu Excise Duty Act, 1964, as extended to the Union territory of Daman and Diu, *ether such duties are payable by the seller or any other person;

1. (vi) the amount received or receivable by the seller by way of non- rekndable deposit which has been received or is receivable whether by way of separate agreement or not, in connection with, or incidental to or ancillary to @e sale of goods; and SERIES - I NO. : 05 DATED laTH AUGUST, 2005. - (vii) relation to works wnbact, the amount of valuable consideration paid or payable to a dealer for the execution of the works contract, -. but does not include--

1. (a) any sum allowed as discount aich reduces the sale price according to . . the practice normally prevailing in !lie trade;

1. (6) the cost of freight or delivery or the cost of installation & cases where such cost is separately charged;
   • (zb) "Schedule" mm a Schedule appended& this Regulation; (zc) "suEcient proof' means such documents, testimony or other evidence ' relevant for deposit pf fax, filing of return or proceedings under Regulation &d 'which may be prescribed; (4 'Ya;" means tax leviable and payable under this Regulation;
   • (re) ''taxable quantum" means the amount specified in sub-section (2)of section 18;.

(zj ''tax invoice" means a tax invoice of the naom refened to in section 50;

1. (zg) 'w period" means such, period as may'be prescribed;
2. (zh) "tax fraction" means the fiaction calculated in accordance with formula given below- r / (Ii100) where 'I' is the percentage rate of tax applicable to the sale under this Regulation;
3. (zi) "transporter" means any persdn who, for the purposes of, or in connection with, or incidental to, or inthe'wurse of, his business, hansports or causes to transport goods, and includes any person whose business consists of shipping, air cargo, inland container depot, wntaiuer freight station, courier service, airline or railways;
4. (zj) "tiunover of purchases'' means the aggregate of the amounts of pur,chsse

price.(including any.input tax) paid or payable by a person in any tax peripd;

1. (zk) "turnover" means the aggregate of the amounts of sale price received or , . receivable by the person in any tax period, as reduced bq any tax for which the person is liable under section.3; (rl)"value of gqods" means the fair market value of the goods and 'includes insurance charges, excise duties, wuntervailing duties, tax paid or payable under the Central Sales Tax Act, ,1956, kansport charges, freight charges and all other charges 74 at 1956. incidental to the sale of the goods;
2. (zm) "works contract" included any agreement for cari-ying out, the wnshuction

of building, manufachlfe, processing, fabrication, erection, installation, fitting out,

improvkment, repair or wmmissioning of anj moveable or immovable property, whether . A for cash or the deferred payment or for oper valuable consideration; i

1. (zn) "y& means the financial year. , . CHAPTER n 4' . . Iicmm& AWD LWY OF TAX

1. (1) Every dealer, who isffigis&d undkthis ~e~ulation or iquired to be registered tax. under this Regulation, shall be liable to pay ta~calculated in accordance with section 11. .. . .. pmKzir -. DATED 18~ AUGUST, 2005. . ~- . ~ . ', a .
2. (2) The tax calculated~under sub-section (I) shall be payable on every sale of goods , . 'effected by a dealer-
   • (a) on and from the day on which the dealer was required to be registered under this Regulation; or , ,
   • (b) during the period he is registered as a dealer under this Regulation. . .
3. (3) The liability to pay tax shall be on the sales effected after a.dealer exceeds the taxable quantunl.
4. (4) The net tax shall be paid by a dealer within twenty-eight days from thekt day of his tax period.

'(5) Tax shall be paid in the manner specified in section 36.

(@Every dealer, who becbmes liable to,pay tax under this ~egulation oh the sale of '

goods, shall continue to be so liable unl&s his taxable turnover during any preceding

bnsecutive twelve months or su~h further period as may be prescribed, has remain+below the taxablequantum and on the expiry ofsuch twelve monthsor further period his liabilityto pay tax shall ceaie: Provided that any dealer, whose liability to pay tax under this Regulation ceases for any other reason, may apply for the cancellation of his certificate of registration on or after the date on which his liability to pay tax ceases, and on such cancellation, his liability to pay tax shall cease: Provided krther that adealer shall remaip liable to pay tax until the date on which his cdrtificate of registration is cancelled. ,

1. (7) Every dealer,whose liability to pay tax under this Regulation has ceased or whose ' certificate of ~egistrati~n hw been cancelled, shall, if his turnover calculated from the cowmencement of any year (including the year in which the registration has been cimcelled), at any subsequent day exceeds the taxable quantum within such year, be liable to pay such tax on and from the date on which his hover subsequenily exceeds the taxable quantum, on all sales effected by him on and after that day.
2. (8) Where it is found that any person registered is a dealer ought not to have been so registered, thennotwithstanding anything contained in this Regulation, such person shall be liable to pay tax for'the period during which he was so registered.
3. (9) If any person who transporls goods or holds goods in custody for delivery to, or on behalf of any person, on being required by the Commissioner- I
   • (a) to furnish any hfosmation in his possession in respect of'the goods; or '
   • (b) to permit inspection thereof, fails to furnish such information or permit such inspection, then, without prejudice to any othef action whichmay be taken agalnst such person, under this Regulation or any other law for the time being in force, a presumption may be raised that the goods in respect of which he has failed to

fhish such information or permit such inspection, are owned by him and

are held by him for sale in Daman and Diu and the provisions ofthis Regulation shall apply accordingly.

&pIanarion.-For the removal of doubts ii is hereby declared that the tax levied

, ' under this section shall apply to every- .. .

1. (a) sale (including a sale by way ofdnstalment or hire- purchase) ofgoods, made on and after the date of commencement ofthis Regulation;
2. (b) sale by way of the transfer of a right to use goods, to the extent that the right to use goods is exercised after the date of commencement of this Regulation. Rates of tax. Determination oftaxable iumovs. Sale ofccrtsin goods exempt from levy of lax: SERIES - I No. : 05 DATED lgTH AUGUST, 2005. -- .- -. - 4. (1) The rates of tax payable on the taxable turnover of a dealer shall be- (a)' in respect of goods specified in the Second Schedule, at the rate of one per cent.;

1. (6) in respect of goods specified in the Third Schedule, at the rate of four per cent.;
   • (c) in respect of goods specified in the Fourth Schedule, at the rate of twenty per cent.;
   • (d) in the case of any other goods, not specified in the Fist, Second, Third and 'liourth Schedules, at the rate oftwelvc and a half per cent,: Provided that the rate of tax on packing materials or containers shall be the same as the rate at which the goods so packed or contained are chargeable to tax.
2. (2) Subject to such conditions as it may impose, the Government may, if it considers it necessary so to do in the public interest, by notification, specify a lower rate of tax than rate of tax specified under clauses (a) to (a') of sub-section (I).
3. (3) Every notification made under sub-section (2) shall be laid, as soon as may he after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry ofthe session immediately following the session or the successive sessions

aforesaid, both Houses agree in making any modification in the notification or both Houses

agree that the notification should not be made, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that, any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.

5. (1) For the purposes of this Regulation, taxable turnover means the turnover of a

dealer during the tax period which remains after deducting therefrom-

1. (a) thb turnover of sales not liable to tax under section 7; and
2. (b) the turnover of sales of such goods which are exempt under section 6.

1. (2) (a) In the case of turnover arising from the execution of a works contract, the taxable turnover means so much of turnover which represents the price and other charges in

relation to goods in such works

contract subject to such conditions as may be prescribed.

1. (b) Wheretheamount ofpriceand other charges in relation tothe goods in such contract . is not ascertainable from the terms and conditions of the contract, the amount of such price and other charges shall be calculated as the sale price stipulated in the contract as reduced by the prescribed percentage, Explanation.-For the removal of doubts, it is hereby declared that where an amount is paid or received prior to the date of commencement of this Regulation in respect of a sale or purchase occurring after the date of commencement of this Regulation, and the person calculates

hisrturnover or turnover of purchases based on amounts paid and received, the

amount shall be treated as forming part of the person's turnover or turnover of purchases in

the tax period in which the sale or purchase occurs.

6. (1) The sale of goods specified in the First Schedule shall be exempt from tax:

Provided that the Government may, by notification, specify the codditions and

.exceptions, if any, for the purposes of such exemptions.

1. (2) Where a dealer sells Capital goods used by him on and from the time of purchase exclusively for purposes other than making non-taxed sale of goods, and has not claimed a taxcredit in respect of such capital goodsunder section 9, the saleofsuc~~~~ital~oods shall be exempt from tax. L- .. . : SERIES - I No. : 05 DATED isTH AUGUST, 2005.
   • • - - . -
2. (3) Where any dealer has purchased any goods on the basis ofa declaration or certificate under any order or scheme referred to in sub-section (5) an&'
   • (a) any of the conditions subject to which such exemption was granted, or
   • (b) any of the recitals or the conditions of the declaration, or certificate,

provisions of this Regulation, such dealer, shall, notwithstanding that such dealer or person was not liable to pay tax underany other provisions of this Regulation, be liele to pay tax

on the sale price of the goods at the rates specified in section 4 and accordingly the dealer,

who has become liable to pay

tax under this sub-section shall, file a return in the preicribed

form to the prescribed authority within a prescribed time, and include the sale price of such

turnover in his return, and pay the

tax in the prescribed meher.

1. (4) The tax due from any dealer referred to in sub-section (3) shall be assessed and tax recovered as if the dealer is a dealer liable to be proceeded against under the provisions of this Regulation. , (5) Subject to such conditions as the Government may, by notification, specify, all exports from the export, orientedunit, electronic hardware and technology park, software technology park unit and theipecial economic zone located within Daman and Diu, shall he exempted from the levy of tax. Exp1a~lion.-For the purposes ofthis sub-section, "exportoriented unit", "electronic hardware and technology park", "&Aware technology park unit"and the "special economic zone" shall mean the delineated area as may be notified by the Central Government to be such 'Unit' or 'Park' or '2dne1, as the w may be. . . . >
2. (6) In a case where adealei or a class of dealers had been granted exemption before tl~e'cornmeneement of his Regulation from levy of tax underthe~han and Diu Sales Tax 4 or 1964. Act, 1964 repealed by section !06, the~overnment may, by geried or speclal order, published in the Official Gazette, provide' for a deferral scheme (including ascheme providing the

manner in which such exemption

eom tax shall be continued) or~grant exemption from levy of tax to such dealer or claisaf dealers and such deferral scheme or exemption shall be for the remaining period for which the dealer or class of dealers hadbee'nexempted under the

(a)' in respect of goods specified in the Second Schedule, at the rate of one per cent.;

1. (6) in respect of goods specified in the Third Schedule, at the rate of four per cent.;
   • (c) in respect of goods specified in the Fourth Schedule, at the rate of twenty per cent.;
   • (d) in the case of any other goods, not specified in the Fist, Second, Third and 'liourth Schedules, at the rate oftwelvc and a half per cent,: Provided that the rate of tax on packing materials or containers shall be the same as the rate at which the goods so packed or contained are chargeable to tax.
2. (2) Subject to such conditions as it may impose, the Government may, if it considers it necessary so to do in the public interest, by notification, specify a lower rate of tax than rate of tax specified under clauses (a) to (a') of sub-section (I).
3. (3) Every notification made under sub-section (2) shall be laid, as soon as may he after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry ofthe session immediately following the session or the successive sessions

aforesaid, both Houses agree in making any modification in the notification or both Houses

agree that the notification should not be made, the notification shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that, any such modification or annulment shall be without prejudice to the validity of anything previously done under that notification.

1. (1) For the purposes of this Regulation, taxable turnover means the turnover of a dealer during the tax period which remains after deducting therefrom- (a) thb turnover of sales not liable to tax under section 7; and (b) the turnover of sales of such goods which are exempt under section 6. (2) (a) In the case of turnover arising from the execution of a works contract, the taxable turnover means so much of turnover which represents the price and other charges in relation to goods in such works contract subject to such conditions as may be prescribed. (b) Wheretheamount ofpriceand other charges in relation tothe goods in such contract . is not ascertainable from the terms and conditions of the contract, the amount of such price and other charges shall be calculated as the sale price stipulated in the contract as reduced by the prescribed percentage, Explanation.-For the removal of doubts, it is hereby declared that where an amount is paid or received prior to the date of commencement of this Regulation in respect of a sale or purchase occurring after the date of commencement of this Regulation, and the person calculates hisrturnover or turnover of purchases based on amounts paid and received, the amount shall be treated as forming part of the person's turnover or turnover of purchases in the tax period in which the sale or purchase occurs.

dealer during the tax period which remains after deducting therefrom-

1. (a) thb turnover of sales not liable to tax under section 7; and
2. (b) the turnover of sales of such goods which are exempt under section 6.

1. (2) (a) In the case of turnover arising from the execution of a works contract, the taxable turnover means so much of turnover which represents the price and other charges in

relation to goods in such works

contract subject to such conditions as may be prescribed.

1. (b) Wheretheamount ofpriceand other charges in relation tothe goods in such contract . is not ascertainable from the terms and conditions of the contract, the amount of such price and other charges shall be calculated as the sale price stipulated in the contract as reduced by the prescribed percentage, Explanation.-For the removal of doubts, it is hereby declared that where an amount is paid or received prior to the date of commencement of this Regulation in respect of a sale or purchase occurring after the date of commencement of this Regulation, and the person calculates

hisrturnover or turnover of purchases based on amounts paid and received, the

amount shall be treated as forming part of the person's turnover or turnover of purchases in

the tax period in which the sale or purchase occurs.

Provided that the Government may, by notification, specify the codditions and

.exceptions, if any, for the purposes of such exemptions.

1. (2) Where a dealer sells Capital goods used by him on and from the time of purchase exclusively for purposes other than making non-taxed sale of goods, and has not claimed a taxcredit in respect of such capital goodsunder section 9, the saleofsuc~~~~ital~oods shall be exempt from tax. L- .. . : SERIES - I No. : 05 DATED isTH AUGUST, 2005.
   • • - - . -
2. (3) Where any dealer has purchased any goods on the basis ofa declaration or certificate under any order or scheme referred to in sub-section (5) an&'
   • (a) any of the conditions subject to which such exemption was granted, or
   • (b) any of the recitals or the conditions of the declaration, or certificate,

provisions of this Regulation, such dealer, shall, notwithstanding that such dealer or person was not liable to pay tax underany other provisions of this Regulation, be liele to pay tax

on the sale price of the goods at the rates specified in section 4 and accordingly the dealer,

who has become liable to pay

tax under this sub-section shall, file a return in the preicribed

form to the prescribed authority within a prescribed time, and include the sale price of such

turnover in his return, and pay the

tax in the prescribed meher.

1. (4) The tax due from any dealer referred to in sub-section (3) shall be assessed and tax recovered as if the dealer is a dealer liable to be proceeded against under the provisions of this Regulation. , (5) Subject to such conditions as the Government may, by notification, specify, all exports from the export, orientedunit, electronic hardware and technology park, software technology park unit and theipecial economic zone located within Daman and Diu, shall he exempted from the levy of tax. Exp1a~lion.-For the purposes ofthis sub-section, "exportoriented unit", "electronic hardware and technology park", "&Aware technology park unit"and the "special economic zone" shall mean the delineated area as may be notified by the Central Government to be such 'Unit' or 'Park' or '2dne1, as the w may be. . . . >
2. (6) In a case where adealei or a class of dealers had been granted exemption before tl~e'cornmeneement of his Regulation from levy of tax underthe~han and Diu Sales Tax 4 or 1964. Act, 1964 repealed by section !06, the~overnment may, by geried or speclal order, published in the Official Gazette, provide' for a deferral scheme (including ascheme providing the

manner in which such exemption

eom tax shall be continued) or~grant exemption from levy of tax to such dealer or claisaf dealers and such deferral scheme or exemption shall be for the remaining period for which the dealer or class of dealers hadbee'nexempted under the Act so repealed.

Nothing contained in this Regulation or the rules made thereunder shall be deemed ccrtaia sales to impow or'authorise the impo$itior, of tax on any sale o when such sale takes . not liabk to place- (ax.

1. (a) in the course.of iatei-state trade or commerca;
2. (b) outside ~k'and Diu; or
3. (c) in the course of @port of the goods hito, or,' the goods out of, the . . territory of India.' . .. ' 74 of 1956. ~rplmlfon.-Sectio~3,4 and 5 of the Central ~ales~g~ct, .. . 1956 shall apply for determining whether or bt aparticular sale takesplace in the pecified in clause (a) or clause (6) or cla* (c) of this~ion. 8. (1) The provisions ofthis section shall apply- ~djushmotr fohn (0 6, in &latiin@ the sale ofgoods by any dea ' i..
4. (A) such sale hai been cancelled; or . ~ . .
5. (B) the *ofsuch sale has been varied 6r &ved;or .. ., .. . . agreed for such sale habk altered by agreement due to the offerof a disco&l or for any other k+mn;
6. (D) the goods or part of the goods sold have been returned to the dealer; or Tax credit.
7. (E) the whole or part of the price payable by the buyer for the purchase of the goods has been written-off by the dealer as a bad debt; and
   • (ii) the dealer has, in relation to the sale of goods,-
8. (A) provided a tax invoice in relation to such sale and the amount shown therein is not the tax properly chargeable on that sale; or
9. (B) firnished a return in relation to such sale and has accounted for an amount of tax on that sale which is not the amount properly chargeable on that sale.

1. (2) Where a dealer has accounted for an amount of tax improperly charged as referred

to in sub-section (I), thedealer shall make an

adjushnent in calculating the tax payable in the return for the

tax period during which it has become apparent that the tax is improperly

charged.

1. (3) If the tax payable in relation to the sale referred to in sub-section(]), exceeds the tax actually accounted for by the dealer, the amount of the excess tax shall be deemed to accrue during the tax period in which the adjustment is made, and such excess tax shall not be athibutable to any earlier tax period.
2. (4) If the tax actually accounted for exceeds the tax payable in relation to the sale referrea to in sub-section (I), the amount of shortfall in tax shall be reduced from the'tax payable by the dealer during the tax period in which the adjustment is made, and such shortfall in tax shall not be alhibutable to any earlier tax period.
3. (5) Where a dealer sells goods which have been use&
   • (a) pattly for making the sales subject to tax under this Regulation or sales not liable to tax under section 7; and
4. (6) partly for other purposes, the amount of tax on the sale of the goods shall be the higher of the following :- (i)A-(AxBIC); or (i0A-B; where

A = the tax for which the dealer shall be liable in respect of the sales other than the

tax liability arising under this section; B = the amount by which the tax credit of the dealer in respect of the goods was reduced under sub-section

1. (4) of section 9; C = the amount of the tax credit before reducing tax credit under sub-section (4) of section 9. 9.
2. (1) Subjkt to the provisionscontained in sub-section (2), adealer, who is registered or is required to he registered under this Regulation, shall be entitled to atax credit in respect ofthe turnover of purchases made during the tax period where the purchase have been made as a dealer and the goods are meant to be used directly or indirectly by him for the purpose of making-
   • (a) the sales which are liable to tax under section 3; or
3. (6) the sales which are not liable to tax under section 7.
4. (2) No tax credit shall he allowed-
   • (a) in the caseofpurchase of goods from a person who is not a registered dealer; SERIES - I No. : 05 DATED laTH AUGUST, 2005.
   • (b) for the purchase of noncreditable goods specified in the Sixth Schedule;
   • (c) for the purchase of goods by a person which are to be used as a part of the structure of a building owned or occupied by stich person. Explanation-For the removal of doubts, it is hereby declared that a tax credit shall be allowed in respect of the goods and building materials which are purchased by a perso11 either for the purposes of re-sale without any alteration, or for the performance of a works contract in respect of a building owned or occupied by another person; and

(4 for the goods purchased from a dealer who has opted to pay tax under

section 16;

1. (3) The amount ofthe tax credit to which adealer isentitled in respect of the purchase of goods shall

be the amount of input tax arising during the tax period as reduced in the

manner specified in sub-sections

1. (4) and (6).
2. (4) Where a dealer has purchased goods and the goods are to he used partly for the

purpose of making the sales referred to in sub-section (I) and partly for other purposes, the

amount of the tax credit shall be reduced proportionately.

1. (5) Every dealer shall determine, in fair and reasonable manner, the extent to which

the goods are used in the manner specified in sub-section

(4): Provided that in case the Commissioner is of the opinion that the manner determined by the dealer is not fair and reasonable, he may-

1. (a) after recording the reasons in writing, reject the method adopted by the dealer and calculate the amount of

tax credit after determining such extent in a fair and

reasonable manner; or (b) in consultation with the Government, specify, by notification, the methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in a case or a class of cases.

1. (a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (I); and
2. (b) the goodi so purchased or goods manufachjh out of such goods so purchased are to be exported From Daman and Diu, by way of winsfer to a- (9 consignment agent who is not residing in Daman and Diu and such transfer is not by way of sale in the Daman and Diu; or
   • (ii) branch of the dealer when such branch is located outside Daman and Diu and such transfer is not by way of sale in Ule Daman an Diu, the amount of the tax creditshall be reduced by such brcentage as may be prescribed.

1. (7) No tax credit shall be allowed under this sectidn fbr-
   • (a) the purchase of goods from an unregisterd dealer;
   • (b) the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the Pirst Schedule.
2. (8) The tax credit shall be claimed by a dealer only if he possesses a tax invoice at the time, prescribed under section 26 or section 27, for filing the return for the tax perfod. .. . Explanation .-Pokthe removal of doubts, it is heeby declared that- , . (0 tax credits arising under this section shall b&allowed only for- . . . .. . ~ . .
   • (a) .a purchase, including a purch an instalment sale and hire- purchase of goods, made on and afte of commencement of this Regulation; or SERIES - I No. : 05 DATED lgn' AUGUST, 2005.
   • (b) a purchase by way of the acquisition of a right to use goods, to the extent that the right to use goods is exercised after the date ofcommencement of this Regulation; (10 Nothing contained in this section shall prevent any person from claiming tax credit allowed under section 14.

~djushmotr fohn (0 6, in &latiin@ the sale ofgoods by any dea ' i..

1. (A) such sale hai been cancelled; or . ~ . .
2. (B) the *ofsuch sale has been varied 6r &ved;or .. ., .. . . agreed for such sale habk altered by agreement due to the offerof a disco&l or for any other k+mn;
3. (D) the goods or part of the goods sold have been returned to the dealer; or Tax credit.
4. (E) the whole or part of the price payable by the buyer for the purchase of the goods has been written-off by the dealer as a bad debt; and
   • (ii) the dealer has, in relation to the sale of goods,-
5. (A) provided a tax invoice in relation to such sale and the amount shown therein is not the tax properly chargeable on that sale; or
6. (B) firnished a return in relation to such sale and has accounted for an amount of tax on that sale which is not the amount properly chargeable on that sale.

1. (2) Where a dealer has accounted for an amount of tax improperly charged as referred

to in sub-section (I), thedealer shall make an

adjushnent in calculating the tax payable in the return for the

tax period during which it has become apparent that the tax is improperly

charged.

1. (3) If the tax payable in relation to the sale referred to in sub-section(]), exceeds the tax actually accounted for by the dealer, the amount of the excess tax shall be deemed to accrue during the tax period in which the adjustment is made, and such excess tax shall not be athibutable to any earlier tax period.
2. (4) If the tax actually accounted for exceeds the tax payable in relation to the sale referrea to in sub-section (I), the amount of shortfall in tax shall be reduced from the'tax payable by the dealer during the tax period in which the adjustment is made, and such shortfall in tax shall not be alhibutable to any earlier tax period.
3. (5) Where a dealer sells goods which have been use&
   • (a) pattly for making the sales subject to tax under this Regulation or sales not liable to tax under section 7; and
4. (6) partly for other purposes, the amount of tax on the sale of the goods shall be the higher of the following :- (i)A-(AxBIC); or (i0A-B; where

A = the tax for which the dealer shall be liable in respect of the sales other than the

tax liability arising under this section; B = the amount by which the tax credit of the dealer in respect of the goods was reduced under sub-section

1. (4) of section 9; C = the amount of the tax credit before reducing tax credit under sub-section (4) of section

1. (1) Subjkt to the provisionscontained in sub-section (2), adealer, who is registered or is required to he registered under this Regulation, shall be entitled to atax credit in respect ofthe turnover of purchases made during the tax period where the purchase have been made as a dealer and the goods are meant to be used directly or indirectly by him for the purpose of making-
   • (a) the sales which are liable to tax under section 3; or
2. (6) the sales which are not liable to tax under section 7.
3. (2) No tax credit shall he allowed-
   • (a) in the caseofpurchase of goods from a person who is not a registered dealer; -12- SERIES - I No. : 05 DATED laTH AUGUST, 2005.
   • (b) for the purchase of noncreditable goods specified in the Sixth Schedule;
   • (c) for the purchase of goods by a person which are to be used as a part of the structure of a building owned or occupied by stich person. Explanation-For the removal of doubts, it is hereby declared that a tax credit shall be allowed in respect of the goods and building materials which are purchased by a perso11 either for the purposes of re-sale without any alteration, or for the performance of a works contract in respect of a building owned or occupied by another person; and

(4 for the goods purchased from a dealer who has opted to pay tax under

section 16;

1. (3) The amount ofthe tax credit to which adealer isentitled in respect of the purchase of goods shall

be the amount of input tax arising during the tax period as reduced in the

manner specified in sub-sections

1. (4) and (6).
2. (4) Where a dealer has purchased goods and the goods are to he used partly for the

purpose of making the sales referred to in sub-section (I) and partly for other purposes, the

amount of the tax credit shall be reduced proportionately.

1. (5) Every dealer shall determine, in fair and reasonable manner, the extent to which

the goods are used in the manner specified in sub-section

(4): Provided that in case the Commissioner is of the opinion that the manner determined by the dealer is not fair and reasonable, he may-

1. (a) after recording the reasons in writing, reject the method adopted by the dealer and calculate the amount of

tax credit after determining such extent in a fair and

reasonable manner; or (b) in consultation with the Government, specify, by notification, the methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in a case or a class of cases.

1. (a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (I); and
2. (b) the goodi so purchased or goods manufachjh out of such goods so purchased are to be exported From Daman and Diu, by way of winsfer to a- (9 consignment agent who is not residing in Daman and Diu and such transfer is not by way of sale in the Daman and Diu; or
   • (ii) branch of the dealer when such branch is located outside Daman and Diu and such transfer is not by way of sale in Ule Daman an Diu, the amount of the tax creditshall be reduced by such brcentage as may be prescribed.

1. (7) No tax credit shall be allowed under this sectidn fbr-
   • (a) the purchase of goods from an unregisterd dealer;
   • (b) the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the Pirst Schedule.
2. (8) The tax credit shall be claimed by a dealer only if he possesses a tax invoice at the time, prescribed under section 26 or section 27, for filing the return for the tax perfod. .. . Explanation .-Pokthe removal of doubts, it is heeby declared that- , . (0 tax credits arising under this section shall b&allowed only for- . . . .. . ~ . .
   • (a) .a purchase, including a purch an instalment sale and hire- purchase of goods, made on and afte of commencement of this Regulation; or SERIES - I No. : 05 DATED lgn' AUGUST, 2005.
   • (b) a purchase by way of the acquisition of a right to use goods, to the extent that the right to use goods is exercised after the date ofcommencement of this Regulation; (10 Nothing contained in this section shall prevent any person from claiming tax credit allowed under section 14. Adjusasnt (o

1. (1) Where any purchaser has been provided by the seller with a credit note or debit 'Mcrcdit, note under section 51 or if be returns or rejects goods purchased, as a consequence of which R

the tax credit, claimed by him in any tax period in respect of which the purchase of goods

relates, becomes short or excess, he shall compensate such shortfall or excess by adjusting d

the amount of the tax credit allowed to him in respect of the tax period in which the credit

note or debit note had been issued or goods are returned.

1. (2) If goods which have been purchased were ,-
   • (a) intended to be used for any of the purposes specified under sub-section (I) of section 9 but are subsequently used, fully orpartly, for purposes other than those specified under the said sub-section; or
   • (b) intended for purposes other than those specified iinder sub-section (1) of section 9, but are subsequently used, !idly or partly, for any ofthepurposesspecified in the said sub-section,

the tax credit claimed in respect of such purchase shall be reduced or increased, as the case

may be, for the tax period during which the said utilisation has taken place.

1. (3) Where-
   • (a) the goods were purchased by a dealer;
   • (b) the dealer claimed a tax credit in respect of the goods, and the amount of tax credit has not been reduced under sub-section (6) of section 9; and
   • (c) the goods are exported from Daman and Diu, other than by way of a sale, to a branch of qe dealer or to a consignment agent, the dealer shall reduce, by the proportion prescribed under sub-section (6) of section 9, the amount of tax credit initially claimed by him.
2. (4) If goods, which have been purchased by a dealer,-
   • (a) were intended to be used for any of the purposes specified under sub-section
3. (1) of section 9; and
   • (b) are subsequently used as a part of structure of a building owned or occupied by him, the tax credit claimed in respect of such purchase shall be reduced in the tax period during which such use takes place. ca~cu~arion of 11. (])The net tax payable by a dealer for a tax period shall he the amount calculated 6; net lax. by the formula given below:- Where-

tax period, after making any adjustments to the tax as required by section 8;

I = the amount of the tax credit arising during the tax period to which the person is

entitled under section 9, after making any adjustments to the tax credit as required by section 10;

SERIES - I No. : 05 DATED 18" AUGUST, 2005. C = the amount, if any, brought forward #kom the previous tax period under sub- section (2). (2)

Where the net tax of a dealer calculated for a tax period under sub-section (I)

amounts to a negative value, the dealer shall-

1. (a) adjustthe said amount in the same tax period against the tax payable by him 74 of 1956. under the Central Sales Tax Act, 1956, if any; and
2. (b) carry forward the surplus amount, if any, after making adjustments under clause
3. (a) to the next tax period within the same fmancial year.

1. (3) Where the net tax of the dealer at the end of the financial year is a negative value, the dealer shall be entitled to claim arehd ofany ex- amount oftaxand the Commissioner shall deal with claim of

rehd in the manner specified in sections 38 and 39:

6; net lax. by the formula given below:- Where-

tax period, after making any adjustments to the tax as required by section 8;

I = the amount of the tax credit arising during the tax period to which the person is

entitled under section 9, after making any adjustments to the tax credit as required by section 10; -14- SERIES - I No. : 05 DATED 18" AUGUST, 2005. C = the amount, if any, brought forward #kom the previous tax period under sub- section (2). (2)

Where the net tax of a dealer calculated for a tax period under sub-section (I)

amounts to a negative value, the dealer shall-

1. (a) adjustthe said amount in the same tax period against the tax payable by him 74 of 1956. under the Central Sales Tax Act, 1956, if any; and
2. (b) carry forward the surplus amount, if any, after making adjustments under clause
3. (a) to the next tax period within the same fmancial year.

1. (3) Where the net tax of the dealer at the end of the financial year is a negative value, the dealer shall be entitled to claim arehd ofany ex- amount oftaxand the Commissioner shall deal with claim of

rehd in the manner specified in sections 38 and 39:

Provided that the dealer may opt to adjust the refund under this sub-section as a tax

credit in any succeeding tax period falling in the next financial year.

1. (1) Subject to sub-sections (2), (3) and (6, the amount of the turnover and the turnover of purchases of a dealer during

~y tax period shall be the amount recorded in the

books of account of the dealer, where those accounts are regularly and properly prepared and maintained, under this sub-section so as to give a true and fair view of his business.

1. (2) The Commissioner may, having regard to trade or accounting practice, by notification,-
   • (a) allow certainclesses ofdealer to record turnover on the basis ofthe amounts paid or received by such dealer; or
   • (b) require certain classes of dealer to record turnover on the basis ofthe amounts payable or receivable by such dealer.
2. (3) Where a dealer intends to change the method of determining the turnover and turnover ofpurchases, he shall make the change with the approval of the Commissioner and the Commissioner may grant such approval, subject to such terms and conditions as he may, having regard to trade or accounting practice, deein fit.
3. (4) The Government may prescribe the period for which turnover ofa dealer, turnover of purchases made by a dealer and adjustment of tax or adjustment to a tax credit by a dealer shall be treated as arising for a class of transactions during that period.

The provisions of tbis Chapter shall have effect, notwithstanding anything

incotisistent therewith contained in any provisions of Chapter 11. 14. (1) Within a period of four months of the commencement of this Regulation, all registered dealers desirous to claim the tax credit referred to in sub-section (2), shall furnish to the Commissioner a

statement, in the form as may be prescribed, containing details of

their trading stock, raw materials and packaging materials for trading stock (in this section referred to as "opening stock") which-

1. (a) is held in Daman and Diuonthe dateofthe commencement ofthisRegulation;

1. (6) was purchased by the dealer after the 1" day ofApril, 2004.
2. (2) If-
   • (a) the dealer has hmished the statement referred to in sub-section (1); Time at which turnover, turnover of purcbsses and adjustmu arise. Provisions of this Ctupta to ovsnidc pmvisions of Chapfa II. Trahncnt of stock bmught fwd during tnosition. SERIES - I NO. : 05 DATED laTH AUGUST, 2005.
3. (6) the tax has been paid in respect of opening stock in accordance with the provisions of the

Daman and Diu Sales Tax Act, 1964, as it stood before its repeal by 4 of 1964.

section 106, at the point specified by the Government under section 8 of the said Act at full rate of tax specified in the Schedules to that Act; and

1. (c) the opening stock has been purchased by the dealer fiom a registered dealer for any of the purposes as are specified in sub-section
   • (I) of section 9, the amount of tax paid under the Daman and Diu Sales Tax Act, 1964, as it stood before its 4 of 1964. repeal by section 106, on such opening stock, determined in such manner and subject to such conditions and restrictions and to the extent as may be prescribed, shall be credited to the registered dealer as a tax credit under section 9: Provided that no tax credit under this section shall be allowed unless the dealer has in his possession, invoices issued by a dealer registered under the Daman and Diu Sales Tax

Act, 1964, as it stood before its repeal by section 106, in respect of the purchases of such

4 of 1964. stock: Provided further that thedealer shall beeligible to claim the entireamount ofcredit to which he is entitled ifsuch entire credit is indicated and claimed in a single statement, which accompanies a return furnished under this Regulation.

1. (3) No fax credit under sub-section (2) shall be claimed- '
   • (a) for finished goods manufactured out of raw material or capital goods on which tax had been paid;
   • (b) for any goods, which were taxable at last point under the Daman and Diu SalesTax Act, 1964 as it stood before its repeal by section 106, held at the time ofthe 4 of 1964. commencement of this Regulation; I
   • (c) in any statement furnished aAer the expiry of four months after the commencement ofthis Regulation; or
   • (d) for opening stock which is held outside Daman and Diu.
2. (4) Every dealer, desirous to claim atax credit for more than one lakh rupees in respect of the opening stock

referred to in sub-section (I), shall furnish alongwith the statement a

certificate signed by an accountant in the prescribed form certiwing that the net credit claim specified in such statement is true and correct.

1. (5) Notwithstanding anything contained in section 3, if-
   • (a) a person was registered as a dealer under the Daman and Diu SalesTax Act, 1964, as it stood before its repeal by section 106; 4 of 1961.
   • (b) the pecson is not registered as a dealer under this Regulation in pursuance of

section 24, and such person has not made an application for grant of

certificab of registration as a dealer within one month of the date of the commencement of this Regulation; and

1. (c) on the date ofthe commencement ofthis Regulation, the dealer held opening stock of finished goods in respect of which tax has not been paid under the Daman and Diu Sales Tax Act, 1964, as it stood before its repeal by section 106, 4 of 1964. the person shall be liable to pay tax under this Regulation at the rate or rates specified in section 4 on the fair market value of the opening stock of finished goods held on the date of the commencement of this Regulation.

1. (6) The tax due under sub-section (5) shall be paid within two months fiom the date of the commencement ofthis Regulation. SERIES - I No. : 05 DATED lsnl AUGUST, 2005. - IS.(/) This section applies where--
   • (a) a registered dealer sells used goods;
   • (b) the registered dealer has purchased goods froma resident seller who was not registered under this Regulation;
   • (c) the goods were purchased either as trading stock for re-sale without any alteration, or for use as raw materials; (4 the registered dealer is liable to tax under section 3 on the sale ofthe goods or the goods which were manufactured after use of such goods as raw material or part of such goods so manufactured, as the case may be; and
   • (e) the registered dealer has sufficient proof of the amount paid for the goods.
2. (2) Subject to the provisions ofsub-section (I), the registered dealer shall be entitled to an amount of tax credit which shall be the lowest of the following, namely:-
   • (a) the input tax borne by the seller who was residing in Daman and Diu when he purchased the goods;
   • (b) the tax fraction of the initial cost of the goods to the seller residing in the Daman and Diu;
   • (c) the tax fraction of the fair market value or the goods at the time of their purchase by the registered dealer; (4 the tax fraction of the consideration paid by the registered dealer for the goods.
3. (3) Where the amount paid by the registered dealer for thegoods exceeds two thousand rupees, the tax credit shall be allowed in the tax period during which such goods are sold by the registered dealer or the goods into which they have been used are sold by the registered dealer. .

ofthis Regulation orin any subsequent year exceeds the taiable quantum under this Regulation but does not exceed twenty five lakh rupees or such other amount as may be specified by the Govehent by notification, shall have an option to pay tax under this section: . ' -7 Provided that this section shall not apply to any dealer, who is registered as a dealer under the Central Sales Tax Act, 1956 or who procures goods from any place outside the Daman and Diu or sells or suppliesgoods to any placeoutside the Daman andDiu duringthe year in which he opts to pay tax under this section.

1. (2) Every dealer, referred to in sub-section (I), at the time of making an application for grant of certificate of registration under section 19, shall be required to specify whether he intends to pay tax under this section: Provided that incase a dealer opts to pay taxunder this section, he may, by an application made to the Commissioner within such time and in such manner as may be prescribed, withdraw his option at any time after the end of the year in which such option was made: Provided further that in a case where a dealer withdraws his option to pay tax under this section, he shall be entitled to claim credit of the tax paid under this Regulation on the tradingstock, raw material and packagingmateriaf held by himintheDaman indDiu on the

date when such option was made subject to the condition or conditions specified in section

20 and applicable to such dealer.

1. (3) In case a person who intends to pay tax under this section and- 4 of 1964.
   • (a) who was registered under the Daman and Diu Sales Tax Act, 1964, at the time of the commencement of this Regulation; Levy of tax and availing of tax credit on uscd goods. Composition scheme for spified dcalm.
   • (b) whose mover in the year preceding the commencement of this Regulation or any subsequent year exceeds the taxable quantum under this Regulation but does not exceed twenty five lakh rupees or such other amount as may be specified by the Government by notification,

he shall specify his intention, within such time and in such manner

as may be prescribed, to pay tax under this section.

1. (4) Wherea dealer opts or intends to pay tax under this section, net tax payable by the dealer shall bethe amount determined atPhe rate of one per cent, ofthe turnover ofthe dealer.
2. (5) A dealer, who opts or intends to pay tax under this section shall,-
   • (a) not compute his net tax under section 11;
   • (b) not be entitled to claim credit under section 9 or section 14 or section IS;
   • (c) not be entitled to issue tax invoice; (4 not collect any amount by way oftax under this Regulation; and
   • (e) retain tax invoices and retail invoices for all of his purchases, as required under section 48.
3. (6) Every dealer, who opts or intends to pay taxunder this Wion, shall be required to pay tax on the trading stock, raw material, packaging material (m this sub-section referred to as "opening stock") and finished goods,-
   • (a) in the case of a dealer referred to in sub-section (3), held on the date of the commencement of this Regulation; or
   • (b) In the me of any other dealer, on the date on which he exercises his option or specifies intention under this sectlon, at the rates specified in section 4 on the Ximarket valueof such opening stock and fmished

goods where no tax has been paid which

was payable on such openhg stock and finished goods under the Daman and Diu SalcsTax Act, 1964, repealed by section 106 or under this 4 of 1964. Regulation.

1. (7) Every dealer shall pay the tax due under sub-section (6) at any tlme befowhe opts to pay tax under this section.
2. (8) Every dealer, who opts or intends to pay tax under this section, shall Rrmish to the

Commissioner the proof of payment of tax referred to in

sub-section (6) along with a statement of opening stock and finishedgoods, in such form as may be prescribed. Tmslctions 17. If- bdkeal related

1. (a) a registered dealer enters into a transaction with the related person for sale of pasom- goods or sells or gives otherwise goods without adequate consideration to a related perspn; or
2. (b) the terms or conditions of such transaction or sale or giving of goods have been influenced by seller being related with such person, the dealer shall not be entitled to a tax credit for the purchase of the goods or he shall be entitled to the proportibnately reduced tax credit under sub-section (3) of section 9 and the transaction or sale or giving of goods

shall be deemed to be a sale made by the

registered dealer and the sale price ofthe goods shall be deeined to be their fair market value.

SERIES - I No. : 05 DATED isTH AUGUST, 2005.

registered dealers desirous to claim the tax credit referred to in sub-section (2), shall furnish to the Commissioner a

statement, in the form as may be prescribed, containing details of

their trading stock, raw materials and packaging materials for trading stock (in this section referred to as "opening stock") which-

1. (a) is held in Daman and Diuonthe dateofthe commencement ofthisRegulation;

1. (6) was purchased by the dealer after the 1" day ofApril, 2004.
2. (2) If-
   • (a) the dealer has hmished the statement referred to in sub-section (1); Time at which turnover, turnover of purcbsses and adjustmu arise. Provisions of this Ctupta to ovsnidc pmvisions of Chapfa II. Trahncnt of stock bmught fwd during tnosition. SERIES - I NO. : 05 DATED laTH AUGUST, 2005.
3. (6) the tax has been paid in respect of opening stock in accordance with the provisions of the

Daman and Diu Sales Tax Act, 1964, as it stood before its repeal by 4 of 1964.

section 106, at the point specified by the Government under section 8 of the said Act at full rate of tax specified in the Schedules to that Act; and

1. (c) the opening stock has been purchased by the dealer fiom a registered dealer for any of the purposes as are specified in sub-section
   • (I) of section 9, the amount of tax paid under the Daman and Diu Sales Tax Act, 1964, as it stood before its 4 of 1964. repeal by section 106, on such opening stock, determined in such manner and subject to such conditions and restrictions and to the extent as may be prescribed, shall be credited to the registered dealer as a tax credit under section 9: Provided that no tax credit under this section shall be allowed unless the dealer has in his possession, invoices issued by a dealer registered under the Daman and Diu Sales Tax

Act, 1964, as it stood before its repeal by section 106, in respect of the purchases of such

4 of 1964. stock: Provided further that thedealer shall beeligible to claim the entireamount ofcredit to which he is entitled ifsuch entire credit is indicated and claimed in a single statement, which accompanies a return furnished under this Regulation.

1. (3) No fax credit under sub-section (2) shall be claimed- '
   • (a) for finished goods manufactured out of raw material or capital goods on which tax had been paid;
   • (b) for any goods, which were taxable at last point under the Daman and Diu SalesTax Act, 1964 as it stood before its repeal by section 106, held at the time ofthe 4 of 1964. commencement of this Regulation; I
   • (c) in any statement furnished aAer the expiry of four months after the commencement ofthis Regulation; or
   • (d) for opening stock which is held outside Daman and Diu.
2. (4) Every dealer, desirous to claim atax credit for more than one lakh rupees in respect of the opening stock

referred to in sub-section (I), shall furnish alongwith the statement a

certificate signed by an accountant in the prescribed form certiwing that the net credit claim specified in such statement is true and correct.

1. (5) Notwithstanding anything contained in section 3, if-
   • (a) a person was registered as a dealer under the Daman and Diu SalesTax Act, 1964, as it stood before its repeal by section 106; 4 of 1961.
   • (b) the pecson is not registered as a dealer under this Regulation in pursuance of

section 24, and such person has not made an application for grant of

certificab of registration as a dealer within one month of the date of the commencement of this Regulation; and

1. (c) on the date ofthe commencement ofthis Regulation, the dealer held opening stock of finished goods in respect of which tax has not been paid under the Daman and Diu Sales Tax Act, 1964, as it stood before its repeal by section 106, 4 of 1964. the person shall be liable to pay tax under this Regulation at the rate or rates specified in section 4 on the fair market value of the opening stock of finished goods held on the date of the commencement of this Regulation.

1. (6) The tax due under sub-section (5) shall be paid within two months fiom the date of the commencement ofthis Regulation. SERIES - I No. : 05 DATED lsnl AUGUST, 2005. - IS.(/) This section applies where--
   • (a) a registered dealer sells used goods;
   • (b) the registered dealer has purchased goods froma resident seller who was not registered under this Regulation;
   • (c) the goods were purchased either as trading stock for re-sale without any alteration, or for use as raw materials; (4 the registered dealer is liable to tax under section 3 on the sale ofthe goods or the goods which were manufactured after use of such goods as raw material or part of such goods so manufactured, as the case may be; and
   • (e) the registered dealer has sufficient proof of the amount paid for the goods.
2. (2) Subject to the provisions ofsub-section (I), the registered dealer shall be entitled to an amount of tax credit which shall be the lowest of the following, namely:-
   • (a) the input tax borne by the seller who was residing in Daman and Diu when he purchased the goods;
   • (b) the tax fraction of the initial cost of the goods to the seller residing in the Daman and Diu;
   • (c) the tax fraction of the fair market value or the goods at the time of their purchase by the registered dealer; (4 the tax fraction of the consideration paid by the registered dealer for the goods.
3. (3) Where the amount paid by the registered dealer for thegoods exceeds two thousand rupees, the tax credit shall be allowed in the tax period during which such goods are sold by the registered dealer or the goods into which they have been used are sold by the registered dealer. .

turnover in the year immediately preceding the commencement

ofthis Regulation orin any subsequent year exceeds the taiable quantum under this Regulation but does not exceed twenty five lakh rupees or such other amount as may be specified by the Govehent by notification, shall have an option to pay tax under this section: . ' -7 Provided that this section shall not apply to any dealer, who is registered as a dealer under the Central Sales Tax Act, 1956 or who procures goods from any place outside the Daman and Diu or sells or suppliesgoods to any placeoutside the Daman andDiu duringthe year in which he opts to pay tax under this section.

1. (2) Every dealer, referred to in sub-section (I), at the time of making an application for grant of certificate of registration under section 19, shall be required to specify whether he intends to pay tax under this section: Provided that incase a dealer opts to pay taxunder this section, he may, by an application made to the Commissioner within such time and in such manner as may be prescribed, withdraw his option at any time after the end of the year in which such option was made: Provided further that in a case where a dealer withdraws his option to pay tax under this section, he shall be entitled to claim credit of the tax paid under this Regulation on the tradingstock, raw material and packagingmateriaf held by himintheDaman indDiu on the

date when such option was made subject to the condition or conditions specified in section

20 and applicable to such dealer.

1. (3) In case a person who intends to pay tax under this section and- 4 of 1964.
   • (a) who was registered under the Daman and Diu Sales Tax Act, 1964, at the time of the commencement of this Regulation; Levy of tax and availing of tax credit on uscd goods. Composition scheme for spified dcalm.
   • (b) whose mover in the year preceding the commencement of this Regulation or any subsequent year exceeds the taxable quantum under this Regulation but does not exceed twenty five lakh rupees or such other amount as may be specified by the Government by notification,

he shall specify his intention, within such time and in such manner

as may be prescribed, to pay tax under this section.

1. (4) Wherea dealer opts or intends to pay tax under this section, net tax payable by the dealer shall bethe amount determined atPhe rate of one per cent, ofthe turnover ofthe dealer.
2. (5) A dealer, who opts or intends to pay tax under this section shall,-
   • (a) not compute his net tax under section 11;
   • (b) not be entitled to claim credit under section 9 or section 14 or section IS;
   • (c) not be entitled to issue tax invoice; (4 not collect any amount by way oftax under this Regulation; and
   • (e) retain tax invoices and retail invoices for all of his purchases, as required under section

Compulsory Regulation if- and voluntary regishation.

1. (a) the turnover of the dealer in the year immediately preceding the commencement ofthis Regulation exceeded the taxable quantum; or
2. (b) the Nmover of the dealer in the year during which this Regulation comes into force or any year thereafter, exceeds the taxable quantum; or
3. (c) the dealer is liable to pay tax, or is registered or required to be registered 9

shall not be required to obtain certificate of regishation under this Regulation.

1. (2) For the purposes of this Regulation, "taxable quantum" of a dealer shall be five lakh rupees, or such other amount as may be specified, by the Government, by notification: Provided that in the case of a dealer who imports for sale any goods into the Daman and Diu, the taxable quantum shall be "Nil" or such other amount as may be specified, by. notification, by the Govemn~ent.
2. (3) For the purposes of this section, in case of dealers involved in execution of works contracts, the taxablequantum shall be calculated with reference to thetotal contract amount received.
3. (4) The taxable quantum of a dealer shall not include turnover from-
   • (a) the sales of capital assets;
   • (b) the sales made in the course of winding up business of the dealer.
4. (5) Any person, who is not required by sub-section (I) to be registered, but who is a dealer; or intends from a particular date to undertake the business which would make him a dealer, may apply for grant of certificate of registration.

1. (1) An application for grant of certificate of registration shall, be made in the Registration prescribed form, within such time, and containing such particulars and information and be accompanied by such fee, security and other documents as may be prescribed.
2. (2) The Administrator may, by order to be published in the Official Gazette, specify certain classes of persons who may not be required to furnish a security.
   • (a) an applicant furnishes, in the prescribed manner, the security for the amount as may be prescribed; and
   • (b) all requirements and provisions of this Regulation for grant of certificate of registration have been complied with, such applicant shall be granted a certificate ofregistration under this Regulation.
3. (4) Where the certificate of registration has not been granted to the applicant within fifteen days from the date on which the application is made, the Commissioner shall, after making such inquiries as he deems fit, either-
   • (a) grant certificate of registration forthwith to the applicant; or
   • (b) issue a notice to the applicant, clearly stating the grounds on which his. application is proposed to he rejected

a~~d allowing him to show cause in writing,

within further fifteen days, why his application should not be rejected: SERIES - I No. : 05 DATED larn AUGUST, 2005. .- .~. . .- . . , . .. . . Providedthatwhere the certificateofregistration has not been granted to the applicant

or such applicant has not been issued

a notice by the required date, the applicant shall be deemed to be registered for the purposes of this Regulation, and the Commissioner shall grant a certificate of registration to such applicant.

1. (5) Where the applicant submits a reply to the notice, under clause (b) of sub-section (4, the Commissioner may, either accept the application and grant a certificate of regisnation to the applicant, or reject the application for reasons to be recorded in writing.
2. (6) If the applicant fails to submit any reply to the notice issued under clause (b) of sub-section
3. (4) within the stipulated time, the application for grant ofcertificate of registration shall stand rejected.
4. (7) Where a registered dealer has furnished a security as a condition for grant of certificate ofregistration, such security shall benecessary for the continuance in effect ofthe certificate of registration, unless otherwise provided by the commissioner. ~ffoct of

1. (1) If acertificate of registration is granted at any time after the commencement of registration. this Regulation and- (a)thedealer holdstradhg stock forthe purpose ofsale, or for useas rawmaterials . for the production of trading stock; (b) the dealer has paid input tax on the purchase of the trading stock or raw . materials; (c) the dealer furnishes a statement of its trading stock and raw materials in the prescribed form to the Commissioner; and (df the dealer possesses sufficient proof of the amount of input tax in respect of the purchases, such dealer shall be entitled to a tax credit for the trading stoct or raw materials held by the dealer on the date on which the certificate ofregistration come into force: Provided that the dealer shall claim the entire amount of tax credit to which he is entitled, in a single claim which accompanies the first return furnished by the dealer under this Regulation. (2) For the purposes ofsub-section (I), the amount of the tax credit shall be the least of the following, namely:- (a) theamount ofinput tax disclosed in the proofreferred to in clause (4 ofsub- section (I); or (b) the &fraction of the cost ofthe goods; or (c)thelax fraction ofthe fair market value ofthe goodsat the time of registration; or (9 the amount spmified under sub-section (3) ofsection 9. (3) Where the registered dealer specifies in his books ofa&ount the turnover on the basis of amo~nts received and hountspaid, he shall exclude from his turnover- (a) any amount received after he has been granted a certificate of registration in respect of sales made and such amount relates to ihe oeriod during which he had not been granted a certificate of registration under this ~~gulation; an2 @)any amount paid after he is registered in respect of purchases made and such amount relates to the period during which he had not been granted a certificate of registration under this Regulation. SERIES - I No. : 05 DATED laTH AUGUST, 2005,

registration. this Regulation and- (a)thedealer holdstradhg stock forthe purpose ofsale, or for useas rawmaterials . for the production of trading stock;

1. (b) the dealer has paid input tax on the purchase of the trading stock or raw . materials;
2. (c) the dealer furnishes a statement of its trading stock and raw materials in the prescribed form to the Commissioner; and (df the dealer possesses sufficient proof of the amount of input tax in respect of the purchases, such dealer shall be entitled to a tax credit for the trading stoct or raw materials held by the dealer on the date on which the certificate ofregistration come into force:

entitled, in a single claim which accompanies the first return furnished by the dealer under this Regulation.

1. (2) For the purposes ofsub-section (I), the amount of the tax credit shall be the least of the following, namely:-
   • (a) theamount ofinput tax disclosed in the proofreferred to in clause (4 ofsub- section (I); or
   • (b) the &fraction of the cost ofthe goods; or (c)thelax fraction ofthe fair market value ofthe goodsat the time of registration; or (9 the amount spmified under sub-section (3) ofsection 9.
2. (3) Where the registered dealer specifies in his books ofa&ount the turnover on the basis of amo~nts received and hountspaid, he shall exclude from his turnover-
   • (a) any amount received after he has been granted a certificate of registration in respect of sales made and such amount relates to ihe oeriod during which he had not been granted a certificate of registration under this ~~gulation; an2 @)any amount paid after he is registered in respect of purchases made and such amount relates to the period during which he had not been granted a certificate of registration under this Regulation. SERIES - I No. : 05 DATED laTH AUGUST, 2005,

within one month, if he-

1. (a) sells or otherwise disposes of his business or any part of his business or any place ofbusiness, or effects, or comes to know of, any other change in the ownership of the business; or
2. (b) discontinues his business or changes his place of business or warehouse, or 'opens a new place of business, or closes the business for a period of mrre than one month; or
3. (c) changes the name, style, constitution or nature of his business; or . (4 enters into partnership or other association in regard to his business or adds, deletes or changes the particulars of the persons having interest in his business.

1. (2) If any such registered dealer dies, his legal representative shall, in like manner specified under sub-section (I), inform the Commissioner.
2. (3) The Commissioner may, after considering any information furnished under this Regulation or otherwise received and after making such inquiry as he may deem fit, amend from time to time any certificate of registration granted under this Regulation.
3. (4) An amendment to certificate of registration made under sub-section (3) shall take

(I).

1. (5) Any amendment to a certificate of registration under this section shall be without prejudice to any liability for tax or interest or penalty imposable or for any prosecution for an offence under this Regulation.
2. (6) For the removal of doubts, it is hereby declared that where a registered dealer-
   • (a) effects a change to the nature ofthe goods ordinarily sold; or
   • (b) is a fm and there is achange in lheconstitutionofthe ti rm withoutdissolution thereof; or
   • (c) is a trustee of a trust and there is a change in tlie trustees thereof; or

family as partners thereof; or

1. (e) is a firm or acompany or a trust or other organisation, and achange occurs in tlie management of the organisation,

informati011 being furnished the certificate of registration shall be amended.

1. (a) a registered dealer, who is required to furnish security under the provisions of this Regulation, has failed to furnish or maintain such security; or
2. (b) a registered dealer has ceased to carry on any activity or business which would entitle him to he registered as a dealer under this Regulation; or
3. (c) an incorporated body has been wound up or otherwise ceases to exist; or (4 the owner of a proprietorship business dies leaving no successor to carry on the business; or
4. (e) in the case of a firm or association ofpersons, it is dissolved; or Amendment of registration. Cancellatian of catiticate of regirtralion SERIES - I No. : 05 DATED lgTH AUGUST, 2005. ~ ~. .~ ~ ~ ~ V) registered dealer has ked to be liable to pay tax under this Regulation; or
5. (g) a registered dealer knowingly furnishes a return which is misleading or deceptive in a material particular; or
6. (h) a registered dealer has committed one or more offences or contravened the provisions of this Regulation; or
   • (i) the Commissioner, after conducting proper inquiries, is ofthe view that it is necessary to do so, the Commissionet may, after service of a notice in the prescribed fonn and after giving the dealer an

opportunity ofheing t1eard;cancel the^ certificate of registration of the dealer with

effect from the date, as may be, specified by him in the notice.

1. (2) Where-
   • (a) a registered dealer has ceased to carry on any activity which would entitle him to be registered as a dealer under this Regulation; or
   • (b) an incorporated body has been wound up or otherwise ceases to exist; or
   • (c) the owner of a proprietorship business dies leaving no successor to carry on business; or
   • (d) in the case of a firm or association of persons, it is dissolved; or
   • (e) a registered dealer has ceased to be liable to pay tax under this Regulation, the.registered dealer or the dealer's'legal representative in case of clause (c) above, shall make an application for cancellation of his certificate of registration to the Commissioner in

the manner and within the time as may be prescribed.

.&planallon,'-For the purpose of this sub-section, "legal representative" has the same meaning as assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908. 5 of 1908.

1. (3) On receipt of such application, if the Commissioner is satisfied that the dealer has ceased to be entitled to be registered, he may cancel the certificate of registration.
2. (4) If a registered dealer ceases to be registered, the Commissioner shall cancel the oaiificate of registration of the dealer..
3. (5) lfcertifieateofregis&tion ofadealer, which has been cancelled under this section, has been restored

as a result of an appeal or other proceeding under this Regulation, the

certificate of registration of such dealer shall be restored and he sl~all be liable to pay tax as if his registrationhad never been cancelled.

. .

1. (6) If any registered aealer, whose certificate of registration has been restored under sub-section (J), satisfies the Commissioner that an excess tax has been paid by him during

adjusted or refvnded in such manner, as may be prescribed.

1. (7) Evejregistered dealer, who applies for cancellation of his oertificateofr~gistration,

shall surrender with his application the certificate of registration granted to him and every.

registered dealer whose certificate of registration is cancelled otherwise than dn the basis of his application shall surrender the certificate of registration within seven days of the date of communication to him of the cancellation.

1. (8) The Commissioner shall, at intervals not exceeding three months, publish in the Ofticial Gazette, such particulars as maybe prescribed, of registered dealers whose certificate of registration has been cancelled.
2. (9) The cancellation of certificate of regisbation shall not affect the liability of any person to pay tax due for any period and unpaid as on the date of such cancellation or which

is assessed thereafter notwithstanding that he is not otherwise liable to pay tax under this

Regulation. SERIES - I No. : 05 DATED laTH AUGUST, 2005.