Sales Tax Instructions

Sales Tax Instructions, 2009
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The commercial importers dealing in locally purchased items will now pay sales
tax on 5% minimum value addition on the supply of such locally produced items
(effective from 1 st July, 2006).
The rules relating to steel melters and re-rollers have been amended to charge the
prescribed ratio of units of electricity consumed per ton for determination of
production. This ratio has now been fixed at six hundred units per metric ton for
steel melters and ninety units per metric tons for steel re-rollers. The Collectors
are advised to nominate an officer not below the rank of an Assistant Collector in
every Collectorate as a focal person to monitor the revenue collection from steel
sector on the basis of new parameters (effective from 1 st July 2006).
To promote the dairy industry the exemption of sales tax on milk, cheese, butter,
yogurt, desi ghee and flavoured milk has been substituted with zero-rating with
immediate effect enabling the manufacturers to claim input tax adjustments.
To provide relief to the stationery industry, pens & ball pens, pencils and
children colours have been zero rated with immediate effect.
As a simplification measure, sales tax on local supply of pesticides shall be
charged on the basis of 30% fixed value addition at import stage and no further
sales tax shall be charged on the subsequent stages of supply of all kinds of
pesticides (with immediate effect).
To promote the usage of indigenous non-chemical fertilizers sales tax on
compost has been zero rated with immediate effect.
As an incentive to the goods transport industry, sales tax on trucks and dumpers
of g.v.w. 5 tone and above has been zero rated with immediate effect.
To promote the aviation industry, sales tax on all aircrafts has been exempted
(effective from 6 th June, 2006).
W.e.f. 1 st July 2006, all retailers having annual turnover of more than 5 million
rupees shall be governed by a single scheme of 3% tax (inclusive of 1% income
tax with no input adjustments. The new procedure regarding retailers has been
notified under the Sales Tax Special Procedure Rules, 2006. However, retailers
opting to pay sales tax at the standard rate of 15% shall be allowed input tax
adjustment.
As a confidence building measure and keeping in view the past experiences, the
powers of sales tax officers to conduct searches without warrant have been
abolished. Now a search, if required, shall be made only under a proper warrant
issued by the Magistrate.