Sales Tax Instructions

Sales Tax Instructions, 2009
further tax of 1% (i.e. a total tax of 13.5% on the value of taxable supplies) under subsection
(1-A) of section 3 of the Sales Tax Act, 1990.
10. All fixed tax schemes (including those on textile processing and brick
kilns) shall expire on 30.6.1998 and such units shall work under the invoice-based GST
system w.e.f. 1.7.1998.
11. All retailers (other than a retailer who deals exclusively in non-taxable
goods and does not deal with any taxable goods), having a total annual turnover (whether
of taxable goods or otherwise) of Rs.5 million for his establishment during the last 12
months shall be registered with the Sales Tax Department, shall issue tax invoices and
shall submit quarterly returns. However, the registration form, tax invoice and quarterly
returns for such retailers shall be simplified ones, as given in notification
No.SRO.583(I)/98, dated 12.6.1998. The value of taxable goods in the invoice shall be
deemed to be inclusive of the amount of sales tax and, therefore, sales tax on such
invoices shall not be shown separately. The formula for determination of tax shall be
hereunder:
Amount of tax = Percentage rate of tax x value of sales
(Percentage rate of tax + 100)
Examples:
If the invoice shows a sale-value (obviously, S.T-paid value) of
Rs.8,000/-, the tax element shall be:
Tax: 12.5 X 8000 = 100,000 = Rs. 888.89
12.5 + 100 112.5
Pre-tax value = 8000 (minus) 888.89 = Rs. 7111.11.
Pre-tax value = 8000 (minus) 888.89 = Rs.7111.11.
12. The retailers having annual turnover of less than the aforesaid turnover
threshold of Rs.5 million per annum shall also have the option to voluntarily register
under section 18 of the Sales Tax Act, 1990, and get into the GST invoice-based system
for availing the benefits of input tax credit system coupled with the benefit of not paying
the aforesaid 1% further tax on their purchase of taxable inputs. The aforesaid benefits
are in addition to the following additional benefits allowed to such ST-registered persons
for income tax purposes, as announced in the budget speech of the Finance Minister:-
i) Major concessions and safeguards extended with a view to removing
apprehensions regarding income tax liability of persons entering the invoice-based
sales tax scheme. Net presumptive tax equal to 1% of turnover shall replace
application of existing G.P. rate subject to the condition that income tax paid shall
not be less than last year‘s liability; and