The total turnover of a dealer, for the purposes of the Act, shall be the aggregate of .-

(1) (a) the total amount paid or payable by the dealer as the consideration for the purchase of any of the goods in respect of which tax is leviable under sub-section (2) of Section 3;

(b) the total amount paid or payable to the dealer as the consideration for the sale, supply or distribution of any goods where such sale, supply or distribution has taken place inside the State, whether by the dealer himself or through his agent;

(c) the total amount paid or payable to the dealer as the consideration for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract including any amount paid as advance to the dealer as a part of such consideration;

(d) the total amount paid or payable to the dealer as the consideration for transfer of the right to use any goods for any purpose (whether or not for specified period);

(e) the total amount payable to the dealer as the consideration in respect of goods delivered on hire purchase or any system of payment by instalments;

(f) the aggregate of the sale prices received and receivable by the dealer in respect of sale of any goods in the course of inter-state trade or commerce and export out of the territory of India and sale in the course of import into the territory of India; and

(g) the value of all goods transferred or despatched outside the State otherwise than by way of sale.

Explanation.- Any amount paid as advance to a dealer as a part of consideration for transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract shall be included in his total turnover in the month in which execution of such works contract commences.

(2) The taxable turnover shall be determined by allowing the following deductions from the total turnover.-

(a) The aggregate of the sale prices received and receivable by the dealer in respect of sales of any goods in the course of inter-state trade or commerce and export out of the territory of India and sales in the course of import into the territory of India.

(b) The value of all goods transferred or despatched outside the State otherwise than by way of sale.

(c) All amounts allowed as discount:

Provided that such discount is allowed in accordance with the regular practice of the dealer or is in accordance with the terms of any contract or agreement entered into in a particular case and the tax invoice or bill of sale issued in respect of the sales relating to such discount shows the amount allowed as discount; and

Provided further that the accounts show that the purchaser has paid only the sum originally charged less discount.

(d) All amounts allowed to purchasers in respect of goods returned by them to the dealer:

Provided that the goods are returned within a period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned, the date on which the refund was made and the amount of such refund together with the details of credit notes issued as specified under sub-section (1) of the section 30.

(e) All amounts received from the seller in respect of goods returned to them by the dealer, when the goods are taxable under sub-section (2) of section 3:

Provided that the goods are returned within period of six months from the date of delivery of the goods and the accounts show the date on which the goods were returned and the date on which the refund was made and the amount of such refund.

(f) All amounts for which goods exempt under section 5 are sold.

(g) All amounts realized by sale by a dealer of his business as a whole.

(h) All amounts collected by way of tax under the Act;

(i) The turnover in respect of which the dealer's agent has paid tax, and the dealer has furnished a certificate in Form VAT 140.

(i-1) All amounts paid or payable to sub-contractors as the consideration for execution of works contract whether wholly or partly:

Provided that, no such deduction shall be allowed unless the dealer claiming deduction produces document in proof that the sub-contractor is a registered dealer liable to pay tax under the Act and that the turnover of such amounts is included in the return filed by such sub-contractor.

Provided further that no such deduction shall be made where deduction of input tax is claimed in respect of tax paid to any sub-contractor.

(j) All amounts separately collected in tax invoices as commission under the provisions of the Agricultural Produce Marketing (Regulations) Act, 1966, by a commission agent:

Provided that the tax is not separately charged for and collected in the tax invoices on such commission.

(k) All amounts received or receivable by way of interest on the unpaid amount payable in respect of goods delivered on hire purchase or on any system of payment by instalments, where such interest is specified and charged for by the dealer separately without including such amounts in the price of the goods delivered and does not exceed twenty percent per annum on the amount remaining unpaid.

(l) All amounts actually expended towards labour charges and other like charges not involving any transfer of property in goods in connection with the execution of works contract including charges incurred for erection, installation, fixing, fitting out or commissioning of the goods used in the execution of a works contract.

(m) Such amounts calculated at the rate specified in column (3) of the Table below towards labour charges and other like charges as incurred in the execution of a works contract when such charges are not ascertainable from the books of accounts maintained by a dealer.

TABLE

Provided that where any deduction is allowed under this clause, then input tax shall not be allowed in respect of tax paid on charges for obtaining, on hire or otherwise, machinery and tools and on purchase of consumables, used in the execution of works contract.

Explanation-I:- In the case of a dealer executing works contract, in determining the taxable turnover during any tax period, the deduction under clause (l) shall be allowed so that such deduction is proportionate to the value of goods, the property in which has been transferred in the execution of works contract in that period, and if the total turnover is not sufficient to cover apart from other deductions, such taxable turnover and such deduction, they shall be determined and allowed proportionately to the extent of the turnover of the dealer in that period, and the balance shall be carried forward to the following tax period or any subsequent tax period to be determined and allowed in the same manner.

Explanation - II: For the purpose of clause (l), "labour and other like charges" include charges for obtaining, on hire or otherwise, machinery and tools used in the execution of a works contract, charges for planning, designing and architects' fees, cost of consumables used in the execution of the works contract, cost of establishment to the extent relatable to supply of labour and services and other similar expenses relatable to supply of labour and services.

Explanation - III: For the purpose of clause (l), gross profit earned by a dealer shall be apportionable to the value of the goods and labour and other like charges involved in the execution of a works contract in the same ratio as in the total turnover.

Explanation IV.- The deduction under clause (d) and (e) shall be allowed in the return to be furnished for the tax period in which the goods are returned by the purchasers or the dealer as the case may be.

(3) (a) A dealer opting to pay tax on the sale of goods under sub-section (4) of Section 4, shall report his option in writing to the jurisdictional Local VAT officer or VAT sub-officer within fifteen days from the commencement of these rules or on the first day of any month after such commencement, indicating the date from which he so opts.

(b)Notwithstanding anything contained in clause (b) of sub-rule (1) and sub-rule (2), the total turnover of such dealer in respect of sale of such goods where the sale has taken place inside the State, shall be,

(i) the aggregate of the maximum retail prices of the goods sold, where such maximum retail prices are exclusive of tax payable under the Act and all amounts collected by way of tax under the Act, or

(ii) the aggregate of the maximum retail prices of the goods sold, where such retail prices are inclusive of tax payable under the Act, and the taxable turnover in respect of such sales shall be determined by allowing deductions specified in clauses (d), (h) and (i) of sub-rule (2) from the total turnover.

(c)The tax invoice issued by such dealer shall contain the details of maximum retail price of the goods including whether such retail price is inclusive or exclusive of tax payable under the Act, in addition to the details prescribed in rule 29.

(4) (a) Notwithstanding anything contained in clause (b) of sub-rule (1) and sub-rule (2), the total turnover in respect of a dealer liable to pay tax on sale of manufactured tobacco under sub-section (5) of Section 4, where the sale has taken place inside the State, shall be the aggregate of maximum retail prices of the goods sold and the taxable turnover in respect of such sales shall be determined by allowing deductions specified in clauses (d), (h) and (i) of sub-rule (2) from the total turnover.

(b) The tax invoice issued by such dealer shall contain the details of maximum retail price of the goods in addition to details specified in rule 29.

Explanation-V - for the purpose of clause (h) of sub-rule (2) of rule 3 all amounts collected by way of tax under the Act by a dealer shall not include all amounts collected by way of tax under section 3-A of the Karnataka Tax on Entry of Goods Act, 1979.