Chapter IV RATE OF TAX AND POINT OF LEVY

1. (1) (a) Subject to the provisions of sections 16 and 17, tax on sale of goods (other than goods specified in Schedule IV) shall be levied at each point in a series of sales in the State of Bihar by a dealer liable to pay tax under this Act.
   • (b) Where the tax is levied at each point of sale, the tax payable by a dealer at any point shall be the amount arrived at after deducting, the input tax credit specified under section 16 or section 17, from the tax computed at that point of sale.
2. (2) (a) The tax on sales, in respect of goods specified in Schedule IV, shall be levied at the first point of their sale in the State of Bihar by a dealer and subsequent sales of the same goods in the State of Bihar shall not be levied to tax, if the dealer making the subsequent sale produces before the prescribed authority the original copy of the cash memo, or invoice or bill issued to him and files a true and complete declaration in the form and in the manner prescribed.
   • (b) The declaration referred to in clause (a) shall be issued by the selling dealer to the purchasing dealer not later than the 30th day of September of the year following the year to which such sales relate.
3. (3) If upon information, the prescribed authority has reasons to believe that the selling dealer has, without reasonable cause, failed to issue to the purchasing dealer the declaration referred to in sub-section (2), he shall, after giving the selling dealer a reasonable opportunity of being heard, direct that the selling dealer shall pay, by way of penalty, a sum of rupees five thousand per month for every month of default or the amount of tax involved, whichever is less.

1. (1) Tax shall be payable on the sale price of --
   • (a) the goods specified in the Schedule II, at the rate of one per cent.;
   • (b) the goods specified in the Schedule III, at the rate of four per cent.
   • (c) the goods specified in the Schedule IV, at the rate not exceeding fifty per cent. but not less than twenty per cent., as the State Government may, subject to such conditions and restrictions, by notification, specify;
   • (d) any other goods, not specified in the Schedules I, II, III and IV, at the rate of twelve and a-half per cent.
2. (2) The State Government may, by notification, alter any Schedule to this Act.

1. (1) Notwithstanding anything to the contrary contained in the Act, the State Government may, by notification and subject to such conditions and restrictions as may be prescribed, permit any class of registered dealers, whose gross turnover does not exceed the limit specified in the notification to pay, in lieu of the tax payable by him, an amount calculated at such rate, not exceeding four per cent. of his taxable turnover, as may be specified in the notification: Provided that no such permission shall be granted to a manufacturer or a person who imports any goods from any place outside the State of Bihar for the purpose of his business: Provided further that the amount so specified shall be in addition to any tax that may be payable by the dealer under section 4.
2. (2) The dealers to whom the provisions of sub-section (1) apply shall--
   • (a) not charge any tax on the sale of goods specified in Schedule I;
   • (b) not charge tax in excess of the rate specified in the notification issued under sub-section (1); and
   • (c) not be entitled to issue tax invoices in respect of sales made by them.
3. (3) If the Assessing Authority has reasons to believe that the dealer was not eligible to pay tax at a rate specified under sub-section (1), the Assessing Authority shall, without prejudice to any action which is or may be taken under section 81, impose a penalty equivalent to three times of the amount of tax arrived at after applying the rate, specified under section 14, to the gross turnover of the dealer after deducting the value of sales under section 6: Provided that no order under this sub-section shall be passed without giving the dealer a reasonable opportunity of being heard.

1. (1) Subject to the provisions of this Act, an input tax credit as provided in this section shall be claimed by a registered dealer, subject to such conditions and restrictions as may be prescribed, on sales of goods in the following circumstances, namely:--
   • (a) when a registered dealer purchases any input within the State of Bihar from another registered dealer after paying him the tax as specified under section 14, he shall claim credit of the input tax in the manner prescribed, if the goods are sold within the State or in the course of inter-State trade and commerce;
   • (b) when a registered dealer--
     • (i) purchases any input within the State from another registered dealer after paying him the tax under section 14, or
     • (ii) purchases any input and pays tax on such purchase under section 4 of the Act, and consumes such goods in the manufacture of any goods mentioned in clause (a), (b) and (d) of section 14, he shall claim credit of the said input tax in the manner prescribed, if the goods so manufactured are sold within the State of Bihar or in the course of inter-State trade and commerce;
   • (c) when a registered dealer purchases any capital goods within the State from another registered dealer after paying him the tax as specified under section 14, and uses such goods in the manufacture of any goods mentioned in clauses (a), (b) and (d) of section 14 and sells the manufactured goods within the State of Bihar or in the course of inter-State trade or commerce, or otherwise, he shall claim and be allowed, in such manner as may be prescribed, credit of the amount of input tax;
   • (d) when a registered dealer holds in stock, on the 1st day of April, 2005, such goods as have been purchased by him on or after the 1st day of April, 2004 and which have suffered the incidence of tax under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94 and--
     • (i) he sells such goods within the State of Bihar or in the course of inter-State trade and commerce, or
     • (ii) he consumes such goods in the manufacture of any goods mentioned in clauses (a), (b) and (d) of section 14 and the goods so manufactured are sold within the State of Bihar or in the course of inter-State trade and commerce, he shall claim credit of the input tax in the manner prescribed;
   • (e) when a registered dealer purchases any input within the State of Bihar from another such dealer after paying him the tax as specified under section 14 at a rate higher than four per cent. and transfers such goods or goods manufactured from such goods to another dealer outside the State of Bihar, he shall be allowed credit of such tax in excess of four per cent. in the manner as may be prescribed: Provided that if the claim for input tax credit under clause (a) or clause (b) or clause (c) or clause (d) or clause (e) for any month exceeds the output tax for the same month, such excess shall be carried forward for adjustment against the output tax of subsequent months, not being a month later than two years after the close of the year during which such excess had arisen and the amount of input tax remaining unadjusted after two years after the close of the year during which such excess had arisen shall be refunded to the dealer subject to the provisions of sections 68, 69 and 71 of this Act: Provided further that input tax credit in respect of capital goods shall be allowed in the manner and over such period, not exceeding thirty-six months from the date of their acquisition, as may be prescribed: Provided also that no credit of input tax shall be allowed in respect of capital assets purchased or acquired before the commencement of this Act.
2. (2) Notwithstanding anything contained in sub-section (1), where a registered dealer purchases any input in the circumstances mentioned in clause (a) or clause (b) or clause (c) or clause (d) of the said sub-section and,--
   • (a) he despatches such goods or the goods manufactured by consuming such goods, to a commission agent registered under this Act or transfers such goods to its branch or head office within the State of Bihar for sale, as the case may be; or
   • (b) he supplies such goods in the course of execution of a works contract to another registered dealer to whom he has let out a sub-contract, for use in the execution thereof, the input tax credit on the sale or supply, as the case may be, of such goods shall be claimed by the registered dealer selling the goods on commission or using the goods supplied in the execution of sub-contract, as the case may be, in accordance with the provisions of sub-section (1), in such manner as may be prescribed.
3. (3) No input tax credit under sub-section (1) shall be claimed or be allowed to a registered dealer--
   • (a) in respect of goods specified in Schedule IV or such other goods as may be prescribed; or
   • (b) in respect of inputs purchased by him from another registered dealer or manufactured by him and the right wherein to use is transferred to another dealer; or
   • (c) in respect of inputs purchased from a registered dealer permitted to pay tax under the provisions of section 15; or
   • (d) in respect of inputs consumed for the manufacture of goods specified in Schedule I; or
   • (e) in respect of goods used for self consumption or as gift.
4. (4) In case the inputs or goods are used partially for the purpose specified in sub- section (3), the claim for input tax credit shall stand reduced to the extent they are so used.
5. (5) (a) No dealer shall claim an input tax credit in respect of inputs purchased unless he is in possession of an original copy of the tax invoice, signed and issued by the selling registered dealer, containing the prescribed particulars of sale.
   • (b) If the original tax invoice is lost, input tax credit shall be allowed only on the basis of a duplicate copy of the original tax invoice in the form and manner prescribed.

1. (1) In the case of a sale in the course of export under section 5 of the Central Sales Tax Act, 1956 (74 of 1956); or sale of any input made to any dealer in a special economic zone outside the customs territory of India; or sale (including sale outside India and Domestic Tariff Area) by an export oriented unit, there shall be no tax payable on the turnover of such sale and the person exporting the goods or selling them shall be entitled, in the manner prescribed, to a credit of input tax paid--
   • (a) on the purchase of the goods sold in the course of export (excluding sale to Domestic Tariff Area) or purchase of goods sold to any dealer in the special economic zone or sale (including sale outside India and Domestic Tariff Area) by an export oriented unit, or
   • (b) on the purchase of inputs and capital assets which have been used for the manufacture of goods sold in the course of export (excluding sale to Domestic Tariff Area) or to any dealer in the special economic zone: Provided that the input tax credit on account of capital assets shall be allowed only to the extent and in the manner prescribed.
2. (2) The organisations specified in the Schedule V to this Act shall be entitled to claim a refund of tax paid on goods purchased in the State of Bihar, subject to such restrictions and conditions as may be prescribed and such organisation shall be entitled to a refund of the same only on an application made to the prescribed authority within such time and in such manner as may be prescribed.

Notwithstanding anything contained in section 14, where any goods packed in any container or packing material are sold or purchased, the container or packing material in which such goods are so packed shall be deemed to have been sold or purchased along with such goods and the tax under sections 3, 4 and 5 shall be levied on the sale or purchase of such container or packing material (whether such packing materials or containers are separately charged for or not) at the rate of tax applicable to the sale or the purchase, as the case may be, of such goods: Provided that where the price of the goods is less than the container or packing material in which they are packed, the rate of tax specified in respect of such containers under sub-section (1) of section 14 shall apply.