Incidence of taxation

Incidence of taxation.-

1. (1) Subject to the provisions of section 6, section 7 and sub-section (2) of section 12, every dealer (except one dealing exclusively in goods declared tax free under section 7) whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected and purchases made after the coming into force of this Act.
2. (2) Every dealer to whom sub-section (1) does not apply or who does not deal exclusively in goods declared to be tax free under section 7 shall be liable to pay tax under this Act on the expiry of 30 days after the date on which his gross turnover during any year first exceeds the taxable quantum: Provided that in the case of a dealer who imports any goods for sale or use in manufacturing or processing, or who manufactures or processes any goods for sale, the liability to pay tax shall commence with effect from the date on which his gross turnover during any year first exceeds the taxable quantum.
3. (3) Notwithstanding anything contained in sub-sections (1) and (2) no tax on the sale of any goods shall be levied if a tax on their purchase is payable under this Act.
4. (4) Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry of three consecutive years during each of which his gross turnover has failed to exceed the taxable quantum and such further period after the date of such expiry as may be prescribed, and on the expiry of his later period his liability to pay tax shall cease.
5. (5) Every dealer, whose liability to pay tax has ceased under the provisions of sub-section (4), shall again be liable to pay tax under this Act with effect from the date on which his gross turnover first exceeds the taxable quantum.
6. (6) In this Act, the expression "taxable quantum" means.-
   • (a) in relation to any dealer who imports for sale or use in manufacturing or processing any goods in Himachal Pradesh, nil;
   • (b) in relation to any dealer, who himself manufactures or produces any goods for sale, 40,000 rupees;
   • (c) in relation to any dealer who runs a hotel, restaurant, bakery or other similar establishment wherein food preparations including tea, are served, 1,00,000 rupees;
   • (d) in relation to any particular classes of dealers not falling within clause (a),
   • (b) and/or (c), such sum as may be prescribed; or
   • (e) in relation to any other dealer, 3,00,000 rupees: Provided that the registration of dealers already registered under this clause shall not be cancelled until their turnover in each of three consecutive years does not entitle them to cancellation under clause (b) of sub-section (6) of section 8.