Composition of Tax

2[x x x] .-

3[(1) Subject to such conditions and in such circumstances as may be prescribed, the assessing authority may, if a dealer whose total turnover in a year is not exceeding

4[rupees ten lakh]

and who is liable to tax under sections

¹ Substituted by Act 32 of 1958 w.e.f. 1.4.1959.

² Omitted by Act 9 of 1970 w.e.f. 1.4.1970.

⁴ Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

⁵ Substituted by Act 18 of 1997 w.e.f. 1.4.1997.

5[5, 5-A, 6 and 6-B] , so elects, accept in lieu of the amount of tax payable by him under this Act, during any year, by way of composition, an amount at the following rates, namely:— 3. Sub-sections (1), (2), (3) substituted by Act 7 of 1997 w.e.f. 1.4.1997.

TABLE

Sl. No. Total Turnover Rates

1. (i) Where the total turnover does not exceed three lakh rupees.

One thousand five hundred rupees.

1. (ii) Where the total turnover exceeds three lakh rupees but does not exceed five lakh rupees.

One thousand five hundred rupees plus two per cent of the turnover exceeding three lakh rupees.

1[(iii)

Where the total turnover exceeds five lakh rupees but does not exceed ten lakh rupees Five thousand five hundred rupees plus three percent of the turnover exceeding five lakh rupees.]

¹ Inserted by Act 3 of 1998 w.e.f. 1.4.1998.

Provided that this sub-section shall not apply to,-

1. (i) dealers in liquor and/or beer;
2. (ii) dealers operating hotels, restaurants or bars and restaurants;
3. (iii) dealers purchasing goods in the course of inter-State trade or commerce against declarations in Form-C, or obtaining goods from sources outside the State against declarations in Form-F;
4. (iv) dealers whose total turnover in the immediately proceeding year as declared in the return or determined in the assessment order was more than 1[ten lakh rupees] .

¹ Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

1. (2) (a) Any dealer eligible for composition of tax under sub-section (1) and who estimates his total turnover for a year to be not more than 1[ten lakh rupees] , may apply to the assessing authority to permit him to pay the amount under this section and on being so permitted, he shall pay the amount due in advance during the year in quarterly instalments and shall submit a return as specified in sub-section (1) of section 12.

¹ Substituted by Act 3 of 1998 w.e.f. 1.4.1998.

Sales Tax [1957: KAR. ACT 25

1. (b) The amount paid under clause (a) shall be subject to such adjustment as may be prescribed on the completion of final assessment.

1. (3) Every dealer complying with the provisions of clause (a) of sub-section
2. (2) shall be assessed on the basis of return submitted in accordance with sub-section (1) of section 12, and such dealer shall not be required to appear or produce the books of accounts before the assessing authority.] 1[Explanation.- x x x] ] 1[(3A) x x x] 1[(4) 2[(i) Notwithstanding anything contained in sub-sections (1) to (3), but subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a hotelier or a restaurateur (other than a hotelier or a restaurateur engaged in reselling of goods purchased by him in the course of inter-State trade or commerce or a dealer engaged in vending of liquor including beer 6[or a hotelier or a restaurateur operating in the same premises or a premises attached to a place where liquor including beer is served] 3[a dealer running a sweet meat stall or ice cream parlour] 4[or a dealer catering food and drinks in places other than where liquor including beer is served (excluding in the premises of a club registered under the Karnataka Societies Registration Act, 1960) or a Registered club including a dealer serving food and drinks in the premises of such club] ), 7[xxx] , so elects, accept in lieu of the amount of tax payable by him under this Act during any year, by way of composition, an amount at the rate of 5[four per cent] of his total turnover.]
   • (ii) Any hotelier or restaurateur 1[or a dealer running a sweet stall or ice cream parlour] 1 2 [or a dealer catering food and drinks or a registered club including a dealer serving food and drinks in such club] may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted, he shall pay the amount due in advance during the year in equal monthly instalments on or before the 3[20th] of the month following each month and for that purpose shall submit such statements or returns in such manner as may be prescribed; 1957: KAR. ACT 25] Sales Tax
   • (iii) The amount paid under clause (ii) shall be subject to such adjustment as may be necessary on the completion of final assessment.] 1[(iv) x x x] 1[(5) Notwithstanding anything contained in this Act, where a dealer has opted for payment of tax by way of composition in any year, the rate at which such tax is payable shall be the rate provided for such payment in this section at the commencement of the year.] 1[(6) 2[(i) Notwithstanding anything contained in section 5-B, but subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a dealer liable to tax under section 5- B so elects, accept in lieu of the amount of tax payable by him during the year under this Act, by way of composition an amount on the total consideration for the works contracts executed by him in that year in the State in respect of Works contract specified in column (2) of the Sixth Schedule 3[at the rate of four per cent] .]
   • (ii) Any dealer may apply to the assessing authority to be permitted to pay the amount under clause (i) and, on being so permitted he shall pay tax in advance as provided for under section 12-B and all the provisions of section 12B mutatis-mutandis shall apply to this sub-section.] 1[(iii) the amount paid under clause (ii), shall be subject to such adjustment as may be necessary on completion of final assessment.] 1[Explanation.— No tax shall be payable under this sub-section on the turnovers relating to amounts paid to sub-contractors as consideration for execution of works contract whether wholly or partly subject to production of proof that such sub-contractor is a registered dealer liable to tax under the Act and that the turnover of such amounts is included in the monthly statements or return of turnover, as the case may be, filed by such sub- contractor.] 1[(7) Nothing contained in sub-Section (6) shall apply to a dealer who purchases or receives goods from outside the State for the purpose of using such goods in the execution of works contract.] 1[(8) Subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a dealer carrying on the business in silk fabrics so elects, accept in lieu of the amount of tax payable by him, during any year, under this Act, by way of composition, an

¹ Omitted by Act 18 of 1994 w.e.f. 1.4.1994.

¹ Inserted by Act 9 of 1986 w.e.f. 1.10.1978 & omitted by the same Act w.e.f. 31.3.1981.

¹ Inserted by Act 7 of 1981 w.e.f. 4.4.1981.

² Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

³ Inserted by Act 4 of 1999 w.e.f. 1.4.1999.

⁴ Inserted by Act 5 of 2000 w.e.f. 1.4.2000 and again substituted by Act, 5 of 2002 w.e.f. 1.4.2002.

⁵ Substituted by Act 4 of 1999 w.e.f. 1.4.1999 and again substituted by Act 5 of 2001 w.e.f. 1.4.2001.

⁶ Inserted by Act 5 of 2001 w.e.f. 1.4.2001.

⁷ Omitted by Act 5 of 2001 w.e.f. 1.4.2001.

¹ Inserted by Act 4 of 19`99 w.e.f. 1.4.1999.

² Inserted by Act 5 of 2000 w.e.f. 1.4.2000 and substituted by Act 5 of 2002 w.e.f. 1.4.2002.

³ Substituted by Act 9 of 1986 w.e.f. 1.4.1986.

¹ Inserted by Act 27 of 1985 w.e.f. 7.9.1978 & omitted by the same Act w.e.f. 2.2.1983.

¹ Inserted by Act 9 of 1986 w.e.f. 1.4.1986.

¹ Inserted by Act 14 of 1987 w.e.f. 1.4.1988 by notification. Text of the notification is at page 431.

² Substituted by Act 5 of 1996 w.e.f. 1.4.1996.

³ Substituted by Act 7 of 1997 w.e.f. 1.4.1997.

¹ Inserted by Act 8 of 1990 w.e.f. 1.4.1990.

¹ Inserted by Act 15 of 1991 w.e.f. 1.4.1991.

¹ Inserted by Act 4 of 1999 w.e.f. 1.4.1999 and Substituted by Act 5 of 2002 w.e.f. 1.4.2002.

Sales Tax [1957: KAR. ACT 25

¹ Inserted by Act 1 of 1996 w.e.f. 1.4.1995 & substituted by Act 3 of 1998 w.e.f. 1.4.1998.

amount at the rate of half percent of his total turnover in respect of silk fabrics;]

¹ Omitted by Act 3 of 1998 w.e.f. 1.4.1998.

1[Explanation I.- x x x Explanation II.- x x x]

1[(9) (i) Notwithstanding anything contained in sub-sections (1) to (3), but subject to such conditions and in such circumstances as may be prescribed, the assessing authority of the area may, if a dealer being mechanized crushing unit producing granite metals so elects, accept in lieu of the amount of tax payable by him under any other provisions of this Act, during any year, by way of composition, an amount at the following rates, namely:- Sl.No. Capacity Rates

1. (i) For each crushing machine of size 36" x9" Rs. 1,00,000 per annum
2. (ii) For each crushing machine of size 16" x 9" Rs. 50, 000 per annum
3. (iii) For each crushing machine of size 12" x 9" Rs. 25, 000 per annum.
4. (ii) Any dealer eligible for composition of tax under clause (i), may apply to the assessing authority to permit to pay the amount under this sub-section and on being so permitted, he shall pay the amount due in advance during the year in equal monthly installments on or before the twentieth day of month following each month and for that purpose shall submit such statements or returns in such manner as may be prescribed.
5. (iii) The amount paid under clause (ii), shall be subject to such adjustment as may be necessary on the completion of final assessment.] 1[(10) Subject to such conditions and such circumstances as may be prescribed, the Assessing Authority of the area may, if a dealer carrying on business in lottery tickets so elects, accept in lieu of the amount of tax payable by him during any year, under this Act, by way of composition, an amount at the following rates, namely,- 1. Subsections (10) and (11) Inserted by Act 5 of 2001 w.e.f. 1.4.2001. 1[TABLE Sl.no TYPE OF DRAW RATE PER DRAW 1. Weekly Draw Fifteen thousand rupees 2. Fortnightly Draw including any draw the period which is more than a week but less than a fortnight. Forty thousand rupees 3. Monthly Draw including monthly Bumper Draw and every draw the Seventy thousand rupees 1957: KAR. ACT 25] Sales Tax period of which is more than a Fortnight but less than a month. 4. Special Bumper Draw or Festival Bumper Draw including any other draw not covered by any other category and any draw the period of which is more than a month. One lakh and seventy five thousand rupees]

¹ Inserted by Act 5 of 2000 w.e.f. 1.4.2000.

¹ Substituted by Act 5 of 2002 w.e.f. 1.4.2002.

1. (11) Notwithstanding anything contained in any other provisions of this Act, the tax payable under sub-section (10) shall be paid ten days prior to the draw.] 1[17-A. Rounding off of tax, etc.- The amount of tax (including tax payable in advance), penalty or any other amount payable and the amount of refund due, under this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise, it shall be ignored.]

¹ Inserted by Act 5 of 1972 w.e.f. 14.8.1972.