the fact that under the -general law relating to sale of goods the property in the goods has by reason

Transcription

1 APPENDICES

2 APPENDIX - A Article 286 of the Constitution before the Constitution (Sixth Amendment) Act, Restrictions as to imposition of tax on the sale or purchase of goods (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods where such sale or purchase takes place--(a) outside the State: or (b) in the course of the import of the goods into, or export of the goods out of, the territory of India. E.xplanation For the purposes of sub c1ause (a), a sale or purchase shall be deemed to have taken place in the State in which the goods have actually been delivered as a direct result of such sale or purchase for the purpose of consumption in that State, notwithstanding the fact that under the -general law relating to sale of goods the property in the goods has by reason of such sale or purchase passed in another State. (2) Except in so far as Parliament may by law otherwise provide, no law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of 476

3 477 any goods where such sale or purchase takes place in the course of inter State trade or commerce: Provided that the President may by order direct that any tax on the sale or purchase of goods which was being lawfully levied by the Government of any State immediately before the commencement of this Constitution: shall, notwithstanding that the imposition of such tax is contrary tn) the provisions of this cflause, continue to be levied until the thirtyfirst day of March, (3) No law made by the Legislature of a State imposing, or authorising the imposition of, a tax (N1 the sale or purchase of any such goods as have been declared by Parliament by law to be essential for the life of the community shall have effect unless it has been reserved for the consideration of the President and has received his assent. Article 286 of the Constitution as at present 286. Restrictions as to imposition of tax on the sale or purchase of goods- (1) No law of a State shall impose, or authorise the imposition of, a tax on the sale or purchase of goods

4 478 where such sale or purchase takes place -(a) outside the State: or (b) in the course of the import of the goods into, or export of the goods out of the territory of India. (2) Parliament may by law formulate principles for determining when a sale or purchase of goods takes place in any of the ways mentioned in clause (1). (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of,- (a) 1 tax cni the sale or purchase of goods declared by Parliament by law to be of special importance in inter-state trade or commerce, or (b) a tax on the sale or purchase of goods, being a tax of the nature referred to in subclause (b), sub clause (c) or sub-clause (d) of clause (29-A) of Article 366, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may by law specify.

5 APPENDIX - B Important provisions of the Central Sales Tax Act 1956 Definition of sale Section 2(g): "'Sale', with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on the hire purchase or other system of payment by instalments, but does not include a ummtgage or hypothycation of or a charge or pledge on goods." Formulation of Principles for Determining when a sale or purchase of goods takes place in the course of inter-state trade or commerce in or outside a State or in the course of import or export A. Sale or purchase in the course of inter-state trade Section 3: "A sale or purchase of goods shall be deemed to take place in the course of inter State trade or commerce if the sale or purchase (a) occasions the movement of goods from one State to another Or] (b) is effected by 2: transfer of documents of title to the goods during their movement from one State to another. 479

6 480 Explanation 1. --Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee. Explanation 2. -_Where tflue movement of goods commences and terminates in the same State it shall not be deemed to be a movement of goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State." B. Sale or purchase outside a State Section 4. "(l) Subject to the provisions contained in Section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States. (2) A sale or purchase of goods shall be deemed to take place inside a State if the goods are within the State (a) in the case of specific or ascertained goods, at the time the contract of sale is made: and (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation. Explanation Where there is aa single contract of sale or purchase of goods situated at more places than one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the goods at each of such place."

7 481 C. Sale or purchase in the course of export or import Section 5. "(l) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India only if the sale or purchase either occasions such export or is effected by a transfer of documents of title to the goods after the goods have crossed the customs frontiers of India: (2) A sale or purchase of goods shall be deemed to take place in the course of the import" of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India. (3) Notwithstanding anything contained in sub section (1), the last sale cn: purchase of goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and VRHS for the purpose of complying with the agreement or order for or in relation to such export." D. Liability to tax on inter-state sales Section 6. "Subject to other provisions contained in this Act, every dealer shall, with effect from such date as the Central Government may, by notification in the official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax

8 482 under this Act on all sales of goods other than electric energy effected by him in the course of inter-state trade or commerce during any year on and from the date so notified: Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods, which in accordance with the provisions of sub-section (3) of Section 5, is a sale in the course of export of those goods out of the territory of India. (la) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him in the course of inter State trade cnr commerce- notwithstanding that run tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State. (2) Notwithstanding anything contained in sub-section CL) or sub-section (la), where a sale of any goods in the course of inter-state trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transfer of documents of title to such goods,

9 483 (A) to the Government, or (B) to a registered dealer other than the Government, if the goods are of the description referred to in sub-section (3) of Section 8, shall be exempt from tax under this Act: Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time or within such further time as that authority may, for sufficient cause, permit,- (a) a certificate duly filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars.h1 a prescribed form from the prescribed Authority; and (b) if the subsequent sale is made (i) to a registered dealer, a declaration referred to in clause (a) of sub-section (4) of Section 8, or (ii) to the Government, not being a registered dealer, a certificate referred to in clause (b) of sub-section (4) of Section 8: Provided further that :U: shall run: be necessary to furnish the declaration or the certificate referred to :h1 clause (b) of the preceding proviso in respect «of 51 subsequent sale of goods, if

10 484 (a) the sale or purchase of such goods is: under the sales tax law of the appropriate State, exempt from tax generally or is subject to tax generally at a rate which is lower than four percent (whether called a tax cnr fee or by any other name): and (b) the dealer effecting such subsequent sale proves to the satisfaction of the authority referred to in the preceding proviso that such sale is of the nature referred to in clause (A) or clause (B) of this sub-section.

11 APPENDIX - C Recommendations of Taxation Enquiry Commission ( ) "The recommendations for Constitutional amendment which are set out below in the form of draft amendments are based on the foregoing considerations. A -- Seventh Schedule (1) In List I, after entry 92, the following new entry shall be inserted, namely: '92A. Taxes on sales or purchases of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce. (2) In List II, for entry 54, the following entry shall be substituted, namely: B - Article 269 '54. Taxes (N1 the sale cn: purchase of goods other than newspapers, subject to the provisions of entry 92A of List I. In clause (1), after sub-clause (f), the following sub-clause shall be inserted, namely: '(g) taxes (N1 the sale cnr purchase of goods other than newspapers, where such sale or purchase takes place in the course of inter State trade or commerce. 485

12 C -- Article (1) In clause (1), the Explanation shall be omitted, and for the words territory of India, the following shall be substituted, namely: territory of India: or (c) in the course of inter State trade or commerce. (2) For clauses (2) and (3), the following clauses shall be substituted, namely: (2) For the purpose of clause (1) of this article, article 269, entry 92A of the Union List, and entry 54 of the State List, Parliament may by Law formulate principles for determining whether a sale or purchase of goods takes place of in the any article. of the ways mentioned in clause (1) (3) Any law of a State shall, in so far as it imposes, or authorises the imposition of, a tax (n1 the sale or purchase of goods declared by Parliament by law to be of special importance in inter-state trade or commerce, be subject to such restrictions and conditions in regard to the system of levy, rates and other incidents of the tax as Parliament may be law specify."

13 APPENDIX - D Q U E S T I O N N A I R 3 Name:... Address:... Occupation... Would you like to remain... anonymous (The identity of those who desire to remain anonymous will not be disclosed) l. Do you think that the border check posts established by the State sales tax laws are barriers to inter State trade. Why? Should the law specify the conditions for treating a transfer of goods as inter State branch transfer? Do you advocate for a uniform Sales Tax Code for all States to follow? 4. (in Do you think that the tax immunity for export trade should be extended to more transactions than the existing ones? Why? (ii) What about imports? Should the exemption be extended to more areas? If so to what extent? 487

14 488 (i) Do you feel that a liberal policy of tax exemption in respect of imported raw-materials will help Indian industry? If so how? (ii) Will such a policy be beneficial to national interest? Do you think that any change is required in the items of goods declared by Parliament to be of special importance in inter-state Trade and Commerce? Why? General remarks: Signature