Chapter II INCIDENCE AND LEVY OF TAX

1. (1) Every dealer whose turnover during the year immediately preceding the commencement of this Act exceeds the taxable quantum and every denier who at the commencement of this Act, is registered or is liable to pay tax under the Central Sales Tax Act, 1956 (74 of 1956), shall be liable to pay tax under this Act on all sales effected by him on or after such commencement.
2. (2) Every dealer to whom sub-section (1) does not apply, shall--
   • (i) with effect from the date immediately following the day on which his turnover calculated from the commencement of any year first exceeds within such year the taxable quantum, be liable to pay tax under this Act on all sales effected by him after that day;
   • (ii) if he becomes liable to pay tax under the Central Sales Tax Act, 1956 (74 of 1956) or is registered as a dealer under the said Act at any time after the commencement of this Act, be liable to pay tax on all sales effected by him or on his behalf within Delhi on or after the date he becomes so liable or is registered under the said Act, whichever is earlier.
3. (3) 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 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 such further period his liability to pay tax shall cease: Provided that any dealer may, after the expiry of one year following the year in which his turnover has failed to exceed the taxable quantum, apply for the cancellation of his certificate of registration, and on such cancellation, his liability to pay tax shall cease: Provided further that in respect of any goods purchased by any dealer before the date of such cancellation and remaining unsold or unutilised for the purpose for which they were purchased, he shall be liable to pay so much of tax as would have been payable had he not been registered as a dealer on the date of purchase of such goods.
4. (4) Every dealer whose liability to pay tax under this Act has ceased under sub-section (3), shall, if his turnover calculated from the commencement of any year again exceeds the taxable quantum on any day within such year, be liable to pay such tax with effect from the date immediately following the day on which his turnover first exceeds the taxable quantum, on all sales effected by him after that day.
5. (5) Any dealer whose certificate of registration has been cancelled under sub-section (3) of section 20, shall--
   • (a) if his turnover calculated from the date of cancellation of such certificate exceeds the taxable quantum on any day within the year; or
   • (b) if his turnover calculated from the commencement of any subsequent year, exceeds the taxable quantum on any day within the year, be liable to pay tax under this Act with effect from the date immediately following the day on which such turnover again first exceeds the taxable quantum on all sales effected by him after that day of goods imported by him from outside Delhi or manufactured by him in Delhi or purchased by him without payment of tax leviable under this Act.
6. (6) No dealer who deals exclusively in one or more classes of goods specified in the Third Schedule shall be liable to pay any tax under this Act.
7. (7) For the purposes of this Act, "taxable quantum" means, --
   • (a) in relation to any dealer who imports for sale any goods into Delhi. . . . . Nil,
   • (b) in relation to any dealer who manufactures goods for sale regardless of the value of goods manufactured . . . . . . . . . Rs. 30,000.00,
   • (c) in relation to any other dealer . . . . . . Rs. 1,00,000.00: Provided that if the Administrator is of opinion that having regard to the difficulty in maintaining accounts or for any other sufficient cause the taxable quantum in respect of any class of dealers falling under clause (b) should be increased, the Administrator may, by notification in the Official Gazette, fix in respect of such class of dealers such taxable quantum, not exceeding rupees one lakh, as may be specified in the notification. Explanation.--For the purposes of computation of taxable quantum under sub-section (7), the turnover of all sales effected by a dealer shall be taken into account irrespective of whether such sales are taxable under this Act or not.

1. (1) The tax payable by a dealer under this Act shall be levied--
   • (a) in the case of taxable turnover in respect of the goods specified in the First Schedule, at the rate of twelve paise in the rupee;
   • (b) in the case of taxable turnover in respect of the goods specified in the Second Schedule, at such rate not exceeding four paise in rupee as the Central Government may, from time to time, by notification in the Official Gazette, determine;
   • (c) in the case of taxable turnover in respect of any food or drink served for consumption in a hotel or restaurant or part thereof, with which a cabaret, floor show or similar entertainment is provided therein, at the rate of forty paise in the rupee;
   • (d) in the case of taxable turnover in respect of any other goods, at the rate of seven paise in the rupee: Provided that the Administrator may with the previous approval of the Central Government and by notification in the Official Gazette, add to, or omit from, or otherwise amend, the First Schedule or the Second Schedule, either retrospectively or prospectively, and thereupon the First Schedule or, as the case may be, the Second Schedule, shall be deemed to be amended accordingly: Provided further that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of any dealer: Provided also that in respect of any goods or class of goods the Administrator is of the opinion that it is expedient in the interest of the general public so to do, he may, with the previous approval of the Central Government and by notification in the Official Gazette, direct that the tax in respect of taxable turnover of such goods or class of goods shall, subject to such conditions as may be specified, be levied at such modified rate not exceeding the rate applicable under this section, as may be specified in the notification.
2. (2) For the purposes of this Act, "taxable turnover" means that part of a dealer's turnover during the prescribed period in any year which remains after deducting therefrom,--
   • (a) his turnover during that period on--
     • (i) sale of goods, the point of sale at which such goods shall be taxable is specified by the Administrator under section 5 and in respect of which due tax is shown to the satisfaction of the Commissioner to have been paid;
     • (ii) sale of goods declared tax-free under section 7;
     • (iii) sale of goods not liable to tax under section 8;
     • (iv) sale of goods which are proved to the satisfaction of the Commissioner to have been purchased within a period of twelve months prior to the date of registration of the dealer and subjected to tax under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), as it was then in force, or under this Act;
     • (v) sale to a registered dealer--
   • (A) of goods of the class or classes specified in the certificate of registration of such dealer, as being intended for use by him as raw materials in the manufacture in Delhi of any goods, other than goods specified in the Third Schedule, or newspapers,--
3. (1) for sale by him inside Delhi; or
4. (2) for sale by him in the course of inter-State trade or commerce, being a sale occasioning, or effected by transfer of documents of title to such goods during the movement of such goods from Delhi; or
5. (3) for sale by him in the course of export outside India being a sale occasioning the movement of such goods from Delhi, or a sale effected by transfer of documents of title to such goods effected during the movement of such goods from Delhi, to a place outside India and after the goods have crossed the customs frontiers of India; or
   • (B) of goods of the class or classes specified in the certificate of registration of such dealer as being intended for resale by him in Delhi, or for sale by him in the course of inter-State trade or commerce or in the course of export outside India in the manner specified in sub-item (2) or sub-item (3) of item (A), as the case may be; and
   • (C) of containers or other materials, used for the packing of goods, of the class or classes specified in the certificate of registration of such dealer, other than goods specified in the Third Schedule, intended for sale or resale;
     • (vi) such other sales as are exempt from payment of tax under section 66 or as may be prescribed: Provided that no deduction in respect of any sale referred to in sub-clause (iv) shall be allowed unless the goods, in respect of which deduction is claimed, are proved to have been sold by the dealer within a period of twelve months from the date of his registration and the claim for such deduction is included in the return required to be furnished by the dealer in respect of the said sale: Provided further that no deduction in respect of any sale referred to in sub-clause (v) shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority is furnished in the prescribed manner and within the prescribed time, by the dealer who sells the goods: Provided also that where any goods are purchased by a registered dealer for any of the purposes mentioned in sub-clause (v), but are not so utilised by him, the price of the goods so purchased shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer; and
   • (b) the tax collected by the dealer under this Act as such and shown separately in cash memoranda or bills, as the case may be.

Notwithstanding anything contained in this Act, the Administrator may, by notification in the Official Gazette and subject to such conditions, if any, as may be specified therein, specify the point of sale at which any goods or class of goods may be taxed, and on the issue of such notification, the points of sale in relation to any such goods or class of goods other than the point of sale so notified, shall be exempt from payment of tax under this Act: Provided that no such exemption shall be allowed unless a true declaration duly filled and signed by the registered dealer by whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority is furnished in the prescribed manner and within the prescribed time, by the dealer who purchases the goods: Provided further that the Administrator may, if he is of opinion that it is necessary in the public interest so to do, by notification in the Official Gazette, exempt, subject to such restrictions and conditions as may be specified therein, any dealer or class of dealers from furnishing a declaration under the first proviso.

The burden of proving that in respect of any sale effected by a dealer he is not liable to pay tax under this Act, shall lie on him.

1. (1) No tax shall be payable under this Act on the sale of goods specified in the Third Schedule subject to the conditions and exceptions, if any, set out therein.
2. (2) The Administrator may, with the previous approval of the Central Government and by notification in the Official Gazette, add to, or omit from, or otherwise amend, the Third Schedule either retrospectively or prospectively, and thereupon the Third Schedule shall be deemed to be amended accordingly: Provided that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of any dealer.

Nothing in this Act or the rules made thereunder shall be deemed to impose, or authorise the imposition of a tax on any sale or purchase of any goods when such sale or purchase takes place--

1. (i) in the course of inter-State trade or commerce; or
2. (ii) outside Delhi; or
3. (iii) in the course of the import of the goods into, or export of the goods out of, the territory of India. Explanation.--Sections 3, 4, and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining whether or not a particular sale or purchase takes place in the manner indicated in clause (i), clause (ii) or clause (iii) of this section.