CHAPTER I11 SPECIAL PROVISIONS RELATING IU USED GOODS, COMPOSITION OF TAX, AND TRANSACTION B61WEEN RELATED PERSONS, ETC.

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.