Certain dealers to collect and pay tax

¹ Substituted by Act 4 of 1992 w.e.f. 1.4.1992.

Notwithstanding anything contained in this Act, the Central Government, a State Government, a statutory body or a local authority shall in respect of any sale of goods effected by them be entitled to collect by way of tax any amount which a registered dealer effecting such sale would have been entitled to collect by way of tax under this Act and shall pay the tax so collected into the Government Treasury.]

1[19-A. Deduction of tax at source (in case of works contract).-(1) Notwithstanding anything contained in this Act, the Central Government, or any State Government, or an industrial, commercial or trading undertaking of the Central Government or of any State, or any such undertaking in joint sector or any other industrial, commercial or trading undertaking or any other person or body as may be notified by the Commissioner from time to time or a local authority or a statutory body, shall deduct out of the amounts payable by them to a dealer in respect of works contracts of the nature specified in the Sixth Schedule executed for them in the State, an amount equivalent to the tax payable by such dealer under the Act. Provided that no such deduction shall be made if the amounts payable by them are in respect of sales of any goods, in the course of inter-State trade or commerce or, in the course of export out of the territory of India or, import into the territory of India or, outside the State.

1. (2) The deduction under sub-section (1) shall be made by an authority on the basis of tax payable as calculated by the dealer. Provided that where it is found that the tax payable as calculated by any dealer was less than the tax payable for the works contract executed by more than fifteen per cent and being so informed, the authority shall make deduction out of any amounts payable subsequently based on the certificate issued by the assessing authority of the area or the assessing authority of the dealer on an application to be made by the authority or dealer which shall be disposed of by the assessing authority within ten days from the date of its receipt, failing which deduction shall be made as calculated by the dealer till issue of a certificate.

Sales Tax [1957: KAR. ACT 25

1. (3) The authority making deduction under sub-section (1), shall send every month to the prescribed authority a statement in the prescribed form containing particulars of tax deducted during the preceding month and pay full amount of the tax so deducted by it within twenty days after the close of the preceding month in which such deductions were made and the amount so payable shall for the purposes of Section 13 be deemed to be an amount due under this Act: Provided that where default is made in complying with the provisions of this sub-section, the prescribed authority may, after such enquiry as it deems fit and after giving opportunity to the concerned authority of being heard, determine to the best of its judgment, the amount payable under this sub- section by such authority and the amount so determined shall be deemed to be an amount due under the Act for the purposes of Section 13.
2. (4) If default is committed in the payment of tax deducted beyond ten days after the expiry of the period specified under sub-section (3), the authority making deductions under sub-section (1) shall pay, by way of penalty, a sum equal to the penalty specified under clause (ii) of sub-section (2) of Section 13 during the period in which such default is continued.
3. (5) The authority making deduction under sub-section (1) shall furnish to the dealer from whom such deduction is made, a certificate obtained from the prescribed authority containing such particulars as may be prescribed.
4. (6) Payment by way of deduction in accordance with sub-section (3), shall be without prejudice to any other mode of recovery of tax due under this Act from the dealer executing the works contract.
5. (7) Where tax in respect of the works contract is remitted under sub-section (3), the tax payable by the dealer for any month, quarter or for the whole year, as the case may be in respect of such works contract shall be reduced by the amount of tax already remitted under the said sub-section: Provided that the burden of proving that the tax on such works contract has already been remitted and of establishing the exact quantum of tax so remitted shall be on the dealer claiming the reduction.] substituted by Act 26 of 2004 w.e.f. 1.8.2004. 1[19-AA. Deduction of tax at source in other cases.- (1) Notwithstanding anything contained in this Act, the Government of Karnataka, 2[and Zilla Panchayats] shall deduct out of the amounts payable by them to a dealer in respect of the purchase of goods, other than Petrol and High Speed Diesel, made by them for their bona fide use, an amount at the rate of four per cent or at the rate applicable for the goods so purchased whichever is lower: Provided that,—
   • (a) no such deductions shall be made if the amount payable to the dealer by the authorities mentioned in this sub-section is less than one thousand rupees; or 1957: KAR. ACT 25] Sales Tax 1[(aa) x x x] 1[(aaa) no such deduction shall be made in respect of dealers as may be notified by the Commissioner from time to time.] 1[b) no amount shall be deducted under this sub-section, if any of the goods purchased by the authorities mentioned in this sub-section is not liable to tax either on account of said goods being exempt from tax or not liable to tax at the hands of the selling dealer on the ground that the said goods have been subjected to tax at the hands of the earlier seller, or if the tax payable by the selling dealer on any goods is deferred or exempted by the State Government in pursuance of its Industrial Policy and upon being so certified by the Assessing Authority of the area on an application made by the dealer, which shall be disposed of by the Assessing Authority within one month from the date of receipt, either by issue of certificate as aforesaid or by intimating to the dealer his in-eligibility to such a certificate, as the case may be;]
6. (2) The authority making deduction under sub-section (1), shall send every month to the prescribed authority a statement in the prescribed form containing particulars of tax deducted during the preceding month and pay full amount of the tax so deducted by it or a receipt from a Government Treasury for having remitted the tax so deducted by it within twenty days after the close of the preceding month in which such deductions were made and the amount so payable shall for the purposes of section 13 be deemed to be an amount due under this Act: Provided that where default is made in complying with the provisions of this sub-section, the prescribed authority may, after such enquiry as it deems fit and after giving an opportunity to the concerned authority of being heard, determine to the best of its judgment, the amount payable under this sub- section by such authority and the amount so determined shall be deemed to be an amount due under the Act for the purposes of section 13. 1[(2A) If default is committed in the payment of tax deducted beyond ten days after the expiry of the period specified in sub-section (2), the authority making deductions under sub-section (1) shall pay by way of penalty a sum equal to the penalty specified under clause (ii) of sub-section (2) of section 13 during the period in which such default is continued.]
7. (3) The authority making deduction under sub-section (1) shall furnish to the dealer from whom such deduction is made, a certificate obtained from the prescribed authority containing such particulars as may be prescribed.
8. (4) Payment by way of deduction in accordance with sub-section (1) shall be without prejudice to any other mode of recovery of tax due under this Act from the dealer effecting the sales to the authorities mentioned in sub- section (1).

¹ Inserted by Act 15 of 1988 w.e.f. 1.4.1988 & substituted by Act 7 of 1997 w.e.f. 1.4.1997 and again

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

² Substituted by Act 5 of 2000 w.e.f. 1.4.2000.

¹ Inserted by Act 20 of 1998 w.e.f. 1.4.1998 & omitted by Act 5 of 2000 w.e.f. 1.4.2000.

¹ Inserted by Act 4 of 1999 w.e.f. 1.4.1999.

¹ Substituted by Act 4 of 1999 w.e.f. 1.4.1999.

¹ Inserted by Act 4 of 1999 w.e.f. 1.4.1999.

Sales Tax [1957: KAR. ACT 25

1. (5) Where tax in respect of the purchases is remitted under sub- section (2), the tax payable by the dealer for any month, quarter or for the whole year, as the case may be, in respect of such sales shall be reduced by the amount of tax already remitted under the said sub-section: Provided that the burden of proving that the tax on such sales has already been remitted and of establishing the exact quantum of tax so remitted shall be on the dealer claiming the reduction.] 1[19-B. Power of Government to notify deferred payment of tax, etc., for sick industries 2[and riot affected industries] .- Notwithstanding anything contained in this Act or in the rules made thereunder, but subject to such conditions as may be specified, the State Government may, by notification issued prospectively or retrospectively, in respect of 3[any industry which is declared by the State Government as riot affected industrial unit or any industry considered] as a sick unit under the Sick Industrial Companies (Special Provision) Act, 1985, grant permission to pay in instalments the whole or any part of the tax payable by such unit for any period or defer payment of such tax.] 1[19-C. Power of Government to notify 2[exemption of tax or] deferred payment of tax for new industries.- (1) The Government may, in such circumstances and subject to such conditions as may be prescribed, by notification defer payment by any new industrial unit of the whole or any part of the tax payable in respect of any period 2[or exempt the whole or any part of the tax payable by a new industrial unit in respect of any period.] 1[Provided that notwithstanding anything contained in this Act or in the rules made thereunder but subject to such conditions as the State Government may, by general or special order specify, where a dealer to whom incentives by way of deferment offered by the State Government in its orders issued from time to time has been granted by virtue of eligibility certificate and where liability equal to the amount of any such tax payable by such dealer has been created as loan by the Department of Industries and Commerce. Government of Karnataka, then such tax shall be deemed, in public interest, to have been paid.]
2. (2) Notwithstanding anything contained in this Act, the deferred payment of tax under sub-section (1) shall not attract penalty under clause
   • (ii) of sub-section (2) of section 13, provided the conditions laid down for payment of the tax deferred are satisfied.] 1[Explanation.— For the purpose of this section, `New Industrial unit' 2[shall not include a new industrial unit which uses trade mark or the brand name of any product of an existing industrial unit, but includes] ,—
   • (i) an industrial unit undertaking investment in expansion, diversification or modernisation; 1957: KAR. ACT 25] Sales Tax
   • (ii) an Oil Company marketing products manufactured in the State by another Oil Company, the latter being a new industrial unit.]

¹ Inserted by Act 4 of 1992 w.e.f. 1.4.1992.

² Inserted by Act 6 of 1995 w.e.f. 1.4.1995.

³ Substituted by Act 6 of 1995 w.e.f. 1.4.1995.

¹ Inserted by 18 of 1994 w.e.f. 1.4.1994.

² Inserted by Act 6 of 1995 w.e.f. 1.4.1995.

¹ Inserted by Act 6 of 1995 w.e.f. 1.4.1995.

¹ Inserted by Act 6 of 1995 w.e.f. 1.4.1994 & substituted by Act 7 of 1997 w.e.f. 1.4.1997.

² Substituted by Act 3 of 1998 w.e.f. 1.4.1998.