(1)The tax shall be levied at the rates prescribed under section 4 of the Act and shall be computed as per the provisions of section 3, on the net turnover of sales within the State, deducting from the gross turnover, the sales of goods which have taken place -

(a) in the course of inter-state trade or commerce,

(b) outside the State of Uttaranchal other than by way of sale, and

(c) in the course of export out of the territory of India.

(2) The amounts specified below, if included in the gross turnover of sales within the State, shall be deducted for the purpose of computation of net turnover of sales within the State-

(a) 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 contract or agreement entered into a particular case, and provided also that the accounts show that the purchaser has paid only the sum originally charged, less the discount;

(b) subject to the provisions of the Act, all amounts allowed to purchasers in respect of goods returned by them to the dealer within six months from the date of delivery of the goods:

Provided that the accounts show the dates on which the goods were sold and returned and also the date on which the amount for which the refund was made or credit was allowed:

(c) all amounts for which the dealer sells goods which are not in his stock but which are obtained by him from another dealer specially to accommodate a particular customer and are immediately sold to such customer, provided that the sale is entered in the accounts then and there as an accommodation sale together with the name of the dealer from whom the goods were obtained and the accommodating dealer does not make a profit out of the transaction;

(d) all amounts for which goods exempt from tax under any provision of the Act are sold, provided that the terms and conditions, if any, for such exemption are complied with;

(e) all amounts for which the dealer sells goods on which the composition money under section 7 was paid at the time of entry of such goods at the entry check post ;

(f) all amounts realized by a dealer on account of the sale of his business as a whole.

Explanation : The net turnover for this purpose shall include purchases liable to tax under the provisions of sub-section (10) of section 3 of the Act.

(3)The turnover relating to the business of transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract shall be determined as per the provisions of rule 14.

(4) The turnover relating to the business of transfer of the right to use any goods for any purpose (whether or not for a specified period), shall be determined as per the provisions of rule 15.

(5) The turnover of Special Category Goods specified in Schedule III of the Act and which are liable to tax at the point of sale by Manufacturer or Importer shall be determined separately and its net turnover shall be computed after deducting from its gross turnover, the turnover in respect of such goods purchased from within the State

(6) The turnover of a deler who is neither an importer nor a manufacturer, or who neither imports goods from nor exports goods outside the territory of India, and who has opted for Levy of Presumptive Tax under the provisions of sub-section (1) of Section 7 of the Act shall be determined separately and its net turnover shall be computer after deducting from its gross turnover, the turnover in respect of the goods specified in Schedule II - (C), Schedule III and of the goods specified in Schedule I on which additional excise duty is leviable under Additional Duties of Excise (Goods of Special Importance) Act, 1957.