Section 8 - Rates of tax on sales in the course of inter-State trade or commerce - Central Sales Tax Act, 1956

Rates of tax on sales in the course of inter-State trade or commerce. 8. 1 (1) Every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be 2 [three per cent] of his turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower : Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of tax under this sub-section. (2) The tax payable by any dealer on his turnover insofar as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1), shall be at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State. Explanation . -For the purposes of this sub-section, a dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so liable under that law. (2A) 3 [***] (3) 4 [ The goods referred to in sub-section (1),- ] 5 [(a) ***] 18 [ (b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing for sale of goods specified under clause (d) of section 2; ] ( c ) are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale ; ( d ) are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in 8 [***] clause ( b ) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause ( c ). 9 [ (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority : Provided that the declaration is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit. ] 10 [ (5) Notwithstanding anything contained in this section, the State Government may, 11 [on the fulfilment of the requirements laid down in sub-section (4) by the dealer,] if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette and subject to such conditions as may be specified therein, direct,- ( a ) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, 12 [to a registered dealer] 13 [***] from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) 14 [***] as may be mentioned in the notification ; ( b ) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce, 12 [to a registered dealer] 13 [***] by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) 14 [***] as may be mentioned in the notification. ] 15 [ 16 (6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce to a registered dealer for the purpose of setting up, operation, maintenance, manufacture, trading, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as packing material or packing accessories in an unit located in any special economic zone or for development, operation and maintenance of special economic zone by the developer of the special economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such special economic zone by the authority specified by the Central Government in this behalf. ]] (7) The goods referred to in sub-section (6) shall be the goods of such class or classes of goods as specified in the certificate of registration of the registered dealer referred to in that sub-section. (8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the 17 [prescribed authority referred to in sub-section (4) a declaration in the prescribed manner on the prescribed form obtained from the authority specified by the Central Government under sub-section (6)], duly filled in and signed by the registered dealer to whom such goods are sold. Explanation - For the purposes of sub-section (6), the expression special economic zone has the meaning assigned to it in clause ( iii ) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944 (1 of 1944). ]] ----------------------- Notes:- 1. Substituted vide by Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 01.04.2007. for text before substitution: see Appendix III to this Chapter. 2. In exercise of powers to the Govt. u/s. 8(1), the rate has been reduced to two per cent from three per cent vide Notification No. S.O. 1277(E), DATED 30.05.2008, w.e.f. 01.06.2008. 3. Omitted by the Finance Act, 2002, w.e.f. 11-5-2002, Prior to its omission sub-section (2A), as amended by the Finance Act, 1975, w.e.f. 1-7-1975, read as under: (2A) Notwithstanding anything contained, in sub-section (1A) of section 6 or subsection (1) or clause (b) of sub-section (2) of this section, the tax payable under this Act by a dealer on his turnover insofar as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales lax law of the appropriate State, exempt from lax generally or subject to tax at a rate which is lower than four per cent (whether called a lax or fee or by any other name), shall be nil or as the case may be, shall be calculated at the lower rate. Explanation : For the purposes of this sub-section a sale or purchase of goods shall not be deemed to be exempt from lax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods. Earlier substituted vide by Act, 61 of 1972, Section 5, for sub-section (2A), w.e.f. 1.4.1973, which was earlier inserted by Act 5 of 1958, as amended by Act 28 of 1969 w.e.f. 1.10.1958 and read as:- Notwithstanding anything contained in sub-section (1) oe sub-section (2), if under the sales tax law of the appropriate State the sales or purchase, as the case may be, of any goods by a dealer is exempt from tax generally or is subject to tax generally at a rate which is lower then one per cent (whether called a tax or fee or by any other name), the tax payable under this Act on his turnover in so far as the turnover or any part thereof relates to the sale of any goods shall be nil, or, as the case may be, shall be calculated at the rate lower rate. Explanation- For the purpose of this sub-section a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law it is exempt only in specified circumstances or under specified conditions or in relation to which the tax is levied at specified stages or otherwise then with reference to the turnover of the goods 4. Substituted vide Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 1.4.2007, before it was read as:- The goods referred in clause (b) of sub-section (1)- 5. Clause (a) omitted vide Act 8 of 1963, Section 2, w.e.f. 1.4.1963, before it was read :- in the case of declared goods are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him . 6. Omitted vide Act 8 of 1963, Section 2, w.e.f. 1.4.1963, before it was read :- in the case of goods other then declared goods 7. Inserted vide Finance Act, 2002, w.e.f. 11.05.2002. 8. Omitted vide Act 8 of 1963, Section 2, w.e.f. 1.4.1963, before it was read as:- clause (a) or 9. Substituted vide Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 1.4.2007, before it was read as:- (4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner- (a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in a prescribed form obtained from the prescribed authority; or (b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government: *Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within such further lime as that authority may, for sufficient cause, permit. * Inserted by Act 61 of 1972, Section 5 w.e.f. 1.4.1973. 10. Sub-section (5) Substitute vide Section 5 w.e.f. 1.4.1973., before it was read as:- Notwithstanding anything contained in this section, the *[State government] may, if it is satisfied that it is necessary so to do in the public interest , by notification in the Official Gazette, direct in respect of such goods or classes of goods as may be specified in the notification and subject to such conditions as it may think fit to impose, no tax under this Act shall be payable by any dealer having his place of such business in the *[State] in respect of the sales by him from any such place of business of any goods in the course of inter-State trade or commerce or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification; * Substituted for the words Central Government and any Union Territory respectively by the Act No. 16 of 1957 dated 4.6.1957. 11. Inserted vide Finance Act, 2002, w.e.f. 11.05.2002. 12. Inserted vide Finance Act, 2002, w.e.f. 11.05.2002. 13. Omitted vide Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 1.4.2007., before it was read as:- or the Government 14. Omitted vide Taxation Laws (Amendment) Act, 2007 (16 of 2007), w.e.f. 1.4.2007., before it was read as:- or sub-section (2) 15. Sub-section (6) to (8) Inserted vide Finance Act, 2002, w.e.f. 11.05.2002. 16. Substituted vide Finance (No. 2) Act, 2004 w.e.f. 10.09.2004. before it was read as:- Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce, to a registered dealer for the purpose of manufacture, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as trading or packing material or packing accessories in an unit located in any special economic zone. If such registered dealer has been authorised to establish such unit by the authority specified by the Central Government in this behalf. . 17. Substituted vide Finance (No. 2) Act, 2004, w.e.f. 10.09.2004, before it was read as:- authority referred to in sub-section (6) a declaration in the prescribed manner on the prescribed form obtained from the authority referred to in sub-section (5) . 18. Substituted vide THE FINANCE ACT, 2021 dated 28-03-2021 w.e.f. before it was read as ( b ) 6 [***] are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or 7 [in the telecommunications network or] in mining or in the generation or distribution of electricity or any other form of power;