Incidence af

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