The following Act of the Kerala State Legislature is hereby published for general information. The Bill as passed by the Legislative Assembly received the assent of the Governor on the 28th day of August, 2005.

ACT 39 of 2005

THE KERALA VALUE ADDED TAX (AMENDMENT) ACT, 2005

(As passed by the Assembly)

An ACT

further to amend the Kerala Value Added Tax Act, 2003.

Preamble.-WHEREAS, it is expedient further to amend the Kerala Value Added Tax Act, 2003 for the purposes hereinafter appearing;

BE it enacted in the Fifty-sixth Year of the Republic of India as follows:-

1. Short title and commencement .-

(1) This Act may be called the Kerala Value Added Tax (Amendment) Act, 2005.

(2) Section 23 of this Act in respect of the goods specified in serial numbers 74, 116 and 124 of the Third Schedule shall come into force at once and the remaining provisions shall be deemed to have come into force on the 1^st day of Apri1, 2005.

2. Amendment of Section 2.- In section 2 of the Kerala Value Added Tax Act, 2003 (30 of 2004) (hereinafter referred to as the principal Act),-

(1) for clause (vii), the following clause shall be substituted, namely:-

"(vii) "awarder" means any person who awards any works contract to a contractor for execution."

(2) in clause (x), after the words "in the course of business" the words "the value of which exceeds such limit as may be prescribed" shall be inserted;

(3) for clause (xiv), the following clause shall be substituted, namely:-

"(xiv) "contractor" means any person who undertakes any works contract for execution and includes a sub-contractor"

(4) in clause (xxii), for the words "brings any goods", the words "brings any taxable goods" shall be substituted;

(5) for clause (xxiii), the following clause shall be substituted, namely;-

"(xxiii) "input tax" means the tax paid or payable under this Act by a registered dealer to another registered dealer on the purchase of goods in the course of business and includes the tax paid in the purchase of materials for the research and development in relation to any goods";.

(6) for clause (xxxvi  A), the following clause shall be substituted, namely:-

"(xxxviA) Prevailing market price" means the wholesale price of any goods in force in the market as published by the Economic and Statistics Department of the state or any other authorised agency or in the news paper and in cases where no such published whole sale price is available, the price at which goods of the kind or quality is sold by the Kerala State Civil Supplies Corporation or any other similar agency on the date of sale of such goods".

(7) In clause (lii),-

(a) after the words, figures and brackets, "and Indian Partnership Act, 1932 (Central Act 9 of 1932)", the words "or society including a co-operative society or association of individuals whether incorporated or not" shall be inserted.

(b) for clause (ii) of Explanation III, the following clause shall be substituted, namely:-

"(ii) Any discount on the price allowed in respect of any sale where such discount is shown separately in the tax invoice and the buyer pays only the amount reduced by such discount; or any amount refunded in respect of goods returned by customers shall not be included in the turnover:"

(2) after Explanation V, the following Explanations shall be inserted, namely:-

"Explanation VI:- The turnover in respect of rubber shall be deemed to include any cess leviable under the Rubber Act, 1947 irrespective of whether the payment of cess is deferred till the rubber is consumed by the manufacturer of rubber goods:

Explanation VII: Where a dealer sells any goods purchased by him at a price lower than that at which it was purchased and subsequently receives any amount from any person towards reimbursement of the balance of the price, the amount so received shall be deemed to be turnover in respect of such goods"

3. Amendment of section 6.- In the principal Act in section 6,- (1) in sub-section (1),-

(a) after the words "agent of a non-resident dealer" the words "or dealer in jewellery of gold, silver and platinum group metals or silver articles or contractor or any State Government, Central Government or Government of any Union Territory or any department thereof or any local authority or any autonomous body" shall be inserted.

(b) after the words "The liability to pay tax shall be", the words "on the taxable turnover", shall be inserted;

(c) clause (b) shall be omitted;

(d) for clause (d), the following clause shall be substituted, namely:-

"(d) in the case of goods not falling under clauses (a) or (c) at the rate of 12.5% at all points of sale of such goods within the State Government may notify a list of goods taxable at the rate of 12.5%"

(e) in clause (e), for the words, letters and brackets, "in clause (a), (b), (c) or (d) above", the words, letter and brackets "clauses (a) or (d) above" shall be substituted,

(f) for clause (f) the following clause shall be substituted, namely:-

"(f) in the case of transfer of goods involved in the execution of works contract, where the transfer is not in the form of goods but in some other form,-

(i) where the goods incorporated in the work are separately ascertainable, at the rates applicable to the goods; and

(ii) where the goods incorporated in the work are not separately ascertainable, at the rate of 12.5 per cent at all points of sale;"

(g) to sub-section (1), the following provisos shall be inserted, namely:-

"Provided that where the sale is to the Administrator, Union Territory of Lakshadweep, Laccadive Co-operative Marketing Federation, Kozhikode or the Lakshadweep Harbour Works and registered dealers certified by the Administrator, Union Territory of Lakshadweep, the tax payable under clause (d) shall be at the rate of four percent, subject to such conditions as may be prescribed:

Provided further that a bar attached hotel, as defined under explanation to clause (c) of section 8 or a dealer in petroleum products shall be liable to pay tax under this sub-section if his total turnover under this Act and the total turnover under the Kerala General Sales Tax Act, 1963 (15 of 1963) together is not less than the limit specified under this sub-section:

Provided also that where the total turnover of a dealer, other than an importer or casual trader or agent of a non-resident dealer or dealer in jewellery of gold, silver, and platinum group metals and silver articles or contractor, exceeds ten lakh rupees for the first time during the course of an year, such dealer shall be liable to pay tax under this sub-section only on the turnover in excess of ten lakh rupees; but he shall be liable to pay tax irrespective of the total turnover in any subsequent year:

provided also that in respect of works contracts executed under the Sampurna Gramin Rosghar Yojana or the beneficiary committees using the Member of Parliament/Member of Legislative Assembly Funds or Natural Calamity Relief Funds or Sarva Siksha Abhiyan Funds, where the total amount in repect of individual  contract does not exceed ten lakhs rupees, the tax payable under clause (f) above shall be four per cent.".

(2) after sub-section (1), the following sub-section shall be inserted, namely:-

"(1A) Notwithstanding anything contained in sub-section (1),-

(a) where a dealer whose total turnover for a year is below the limit specified in sub-section (1) collects tax under section 30 on his sales, he shall, whatever be his total turnover for the year, be liable to pay tax under sub-section (1) on the taxable turnover for the year.

(b) Where the sale of any goods is exempted at the point of sale by any dealer, such dealer may, at his option, pay tax in respect of the sale of such goods and thereupon he shall, whatever be his total turnover, be liable to pay tax on the taxable turnover for the year"

(3) for sub-section (2), the following sub-section shall be substituted, namely:-

"(2) Notwithstanding anything contained in sub-section (1)-

(a) Every dealer who purchases taxable goods from any person other than a registered dealer shall pay tax on the purchase turnover of goods at the rates specified under sub-section (1)

(b) Every dealer who purchases taxable goods from any registered dealer other than a dealer liable to tax under this Act and despatches the goods to any place out side the state otherwise than by way of sale in the course of interstate trade or export shall pay tax on the purchase turnover of the goods at the rates specified under sub-section (1), provided that the maximum rate leviable under this clause shall not exceed four per cent:

Provided that a dealer, other than an importer, casual trader, agent of non-resident dealer, dealer in jewellery of gold, silver and platinum group metals or silver articles or contractor or any State Government, Central Government or Government of any Union Territory or any department thereof or any local authority or autonomous body shall not be liable to tax under this sub-section if his total turnover is less than five lakh rupees.

(4) after sub-section (2), the following sub-section shall be inserted, namely:-

"(3) Goods specified in the Fourth Schedule shall be outside the purview of this Act"

(5) for sub-section (5), the following sub-section shall be substituted, namely:-

"(5) Notwithstanding anything contained in sub-section (1), but subject to sub-section (2), any registered dealer not being,-

(a) an importer; or

(b) a dealer making any sale in the course of interstate trade or commerce or export; or

(c) a dealer registered under the Central Sales Tax Act, 1956 (Central Act 74 of 1956); or

(d) a dealer effecting first taxable sale of goods within the State; or

(e) a dealer covered by sub-section (1A) or

(f) a contractor,

whose total turnover for a year is below fifty lakh rupees, may, at his option, pay tax at the rate of half percent of the turnover of sale of taxable goods as presumptive tax instead of paying tax under sub-section (1):

Provided that a dealer holding stock of goods purchased in the course of interstate trade on the date of coming into force of the Act, will have the option to pay tax under this sub-section from the beginning of the quarter following the quarter in which he has sold such goods in the state and paid tax under sub-section (1) of section 6 and his registration under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) is cancelled:

Provided further that any dealer covered by sub-section (1A) may, at his option pay tax under this sub-section from such period as may be prescribed:

Provided also that a dealer shall not be eligible to opt for payment of tax under this sub-section if his total turnover in respect of goods to which this Act applies, whether under this Act or under the Kerala General Sales Tax Act, 1963 (15 of 1963) had exceeded fifty lakh rupees during the year preceding the year to which such option relates.

Explanation:- "First taxable sale" for the purpose of this sub-section shall mean the sale of taxable goods effected by a registered dealer immediately after the import of such goods into the State or its manufacture in the State as the case may be, but shall not include the sale of goods in respect of which tax under section 5 or under sub-section (4) of section 59 of the KGST Act, 1963 (15 of 1963) had been paid and which are held as opening stock on the date of coming into force of the Act."

(6) after sub-section (6), the following sub-sections shall be inserted, namely:-

"(7) Notwithstanding anything contained in sub-section (1),-

(a) any authorized retail or wholesale distributor dealing exclusively in rationed articles namely, rice, wheat and kerosene under the Kerala Rationing Order, 1966 shall not be liable to pay tax on the turnover of such goods;

(b) sale of any industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto to any industrial unit situated in any Special Economic Zone in the State for use in the manufacture of other goods shall, subject to such conditions or restrictions, as may be prescribed, be exempt from tax.

Explanation:- For the purpose of this sub-section, Special Economic Zone shall mean a Special Economic Zone approved and notified as such by the Central Government and includes an existing Special Economic Zone.

(8) The Rules of Interpretation of the Schedules of this Act shall be as set out in the Appendix."

4. Amendment of section 8.- In the principal Act, in section 8,-

(1) in clause (a),-

(a) for item (i) the following items shall be substituted, namely:-

"(i) any works contractor not being a dealer registered under the provisions of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), or dealer effecting first taxable sale in the State may, at his option, instead of paying tax in accordance with the provisions of the said section, but subject to payment of tax, if any payable under sub-section (2) thereof, pay tax at two per cent of the whole contract amount."

(b) in item (ii), for the words "six per cent", the words "four per cent" shall be substituted;

(c) Before the Explanation, the following proviso shall be inserted, namely:-

"Provided that the provisions of this clause shall not apply to any works contract in which the transfer of material is in the form of goods."

(d) for the Explanation, the following Explanations shall be substituted, namely:-

"Explanation I:- "First taxable sale" for the purpose of this sub-section shall have the same meaning as assigned to the term by the explanation under sub-section (5) of section 6.

Explanation II: For the purpose of this clause "whole contract amount" shall not include that portion of a contract which represents amount paid to sub-contractors for execution of works contract provided that the sub-contractor is a registered dealer liable to tax under sub-section (1) or sub-section (1A) of section 6, and the contractor claiming deduction in respect of such amount furnishes certificates in such form as may be prescribed.

Explanation III:- A composite contract for the construction of building shall not be treated as a contract of the nature specified under clause (ii) above which are made ineligible for payment of compounded tax under the said clause merely for the reason that the contract also involves work of the said categories"

(e) after item (ii), the following item shall be inserted, namely:-

"(iii) any contractor who had opted for payment of tax in accordance with the provisions of sub-section (7) or sub-section (7A) of section 7 of the Kerala General Sales Tax Act, 1963 (15 of 1963) in respect of any works contract prior to the date of coming into force of this Act, part of which remains to be executed on such date, such contractor may continue to pay tax in respect of the transfer of goods involved in the unexecuted portion of such contracts, at the rate specified in sub-section (7) or sub-section (7A) of said Act."

(2) Clause (c) except the Explanation, shall be re-numbered as item (i) of the said clause and-

(a) in item (i) as so renumbered, for the words "provisions of section 6, pay tax at one per cent of the taxable turnover", the words, figures and brackets, "provisions of sub-section (1) of section 6 but subject to payment of tax, if any, payable under sub-section (2) thereof, pay tax at half per cent of the turnover of cooked food and beverages prepared by him" shall be substituted.

(aa) After item (i) as so renumbered, the following item shall be inserted, namely:-

"(ii) Any bar attached hotel, not being a star hotel of and above three stat hotel or a club or a heritage hotel may, at its option, instead of paying tax in accordance with the provisions of section 6, but subject to such conditions and restrictions as may be prescribed, pay tax at 12.5% of the turnover of cooked food and beverages prepared by it, calculated at 15% of the turnover of foreign liquor estimated under section 7 of the Kerala General Sales Tax Act, 1963 (15 of 1963)."

(b) in the Explanation, the following words shall be inserted at the end, namely:-

"but shall not include any hotel or restaurant, not being a star hotel, which is licenced to serve only beer"

(3) in clause (d), for the words "Computer disc", the words "Compact disc" shall be substituted.

(4) after, clause (d) the following clause shall be inserted, namely,-

"(e) Any dealer, who is an importer or a manufacturer who is not entitled to any deferment of tax under section 32, of medicines and drugs falling under [***] the Third schedule may, at his option, pay, in such manner and subject to such conditions and restrictions as may be prescribed, in lieu of the tax payable by him on such goods under sub-section (1) of section 6, tax at the rate of 4 percent of the maximum retail price of such goods.

Explanation: For the purpose of this clause, maximum retail price in respect of the goods mentioned means the maximum price printed on the package of any goods at which such goods may be sold to the ultimate consumer:

Provided that where a registered dealer has purchased any goods,-

(a) from an importer or a manufacturer who has opted far payment of tax under this clause; or

(b) from another registered dealer where the tax on the maximum retail price of such goods was paid in the state on an earlier sale,

such dealer shall, notwithstanding anything contained elsewhere in the Act, but subject to such conditions and restrictions as may be prescribed, be exempt from payment of tax under sub-section (1) of section 6 in respect of the sale of such goods and be entitled to recover from the buyers the amount of tax paid by him at the time of purchase of such goods and the turnover of such goods shall not be included in the total turnover for the purpose of sub-section (5) of section 6 where the dealer opts for payment of tax in accordance with the said sub-section in respect of goods other than medicines and drugs."

5. Amendment of section 10.- In the principal Act in sub-section (1) of section 10,-

(a) for the words "within five days from the date of such deduction", the words "on or before the fifth day of the month succeeding the month in which such deduction is made." shall be substituted.

(b) to sub-section (1) the following proviso shall be inserted namely:-

"Provided that in respect of works contract executed under the Sampurna Gramin Rozgar Yojana or the Beneficiary Committees using the Member of Parliament/Member of Legislative Assembly Funds or Natural Calamity Relief Funds of Sarva Siksha Abhiyan Funds, where the total amount in respect of individual contract does not exceed ten lakh rupees, the maximum amount deductable under this section shall not exceed four per cent of the whole contract amount.".

6. Amendment of section 11.- In the principal Act in section11,-

(1) in sub-section (5),-

(a) after clause (g), the following clause shall be inserted, namely:-

"(h) of motor vehicles where such motor vehicle is sold as a used motor vehicle except where such motor vehicle is purchased as a used motor vehicle."

(b) the following Explanation shall be inserted, at the end namely:-

"Explanation:- For the purpose of clause (g) "stores" shall not include spare parts or tools in relation to any goods to which the provisions of this section applies".

(2) in sub-section (6),-

(a) after the words, "for any previous return period(s)" the words "and then to the tax payable by the dealer on the sales in the course of interstate trade" shall be inserted.

(b) for the existing proviso, the following proviso shall be substituted, namely:-

"Provided that where the excess input tax so carried forward cannot be fully adjusted during the last return period of that year, the excess input tax credit so remaining inadjusted shall be refunded to the dealer as if it were a refund accrued under section 13."

(3) for sub-section (9) the following sub-section shall be substituted, namely:-

"(9) Any dealer who claims input tax credit under this section in respect of any purchase shall keep the original tax invoice for such purchase (duly filled in and signed and issued by the selling dealer) wherein the input tax has been separately charged, and produce for verification as and when required by any authority empowered under this Act."

(4) (a) for sub-section (13), except the proviso and the Explanation thereunder, the following sub-section shall be substituted, namely:-

"(13) Subject to the provisions of sub-sections (4) to (7) and sub-sections (9) to (12), input tax credit shall be allowed to a registered dealer in respect of the tax paid under the Kerala General Sales Tax Act, 1963 (15 of 1963) where the tax paid by the dealer who sold the goods to such registered dealer or by any previous seller, or the Kerala Tax on Entry of Goods into Local Areas Act, 1994 (15 of 1994), in respect of goods purchased by him during a period of one year immediately preceding the date of commencement of this Act, subject to such conditions and restrictions as may be prescribed, where such goods are-

(i) held as opening stock on such date and sold or used in the manufacture of taxable goods or used in the execution of works contract or used as containers or packing materials for the packing of taxable goods in the state for sale thereafter; or

(ii) used in the manufacture of taxable goods or as packing materials for the packing of taxable goods and such manufactured or packed goods are held as opening stock on such date; or

(iii) used in the manufacture of taxable goods and are held as opening stock on such date as work in process."

(b) after the existing proviso, to sub-section (13), the following proviso shall be inserted, namely:-

"Provided further that where it is found on audit that the dealer claiming input tax credit under this sub-section has charged tax under section 6 on the turnover of such goods without making any deduction in respect of the tax paid under the KGST Act, 1963 (15 of 1963) for which input tax credit is allowed to him under this sub-section, the input tax credit availed of by him shall be liable to be disallowed to that extent and the input tax credit so disallowed shall be deemed to be reverse tax due under sub-section (7)".

(c) In the Explanation,-

(i) after the words "at the point of first purchase or last purchase" the words "or under Section 5A" shall be inserted.

(ii) the words, figures and brackets "or tax paid by such dealer under the Kerala Tax on Entry of Goods into Local Areas Act, 1994 (15 of 1994)" shall be added at the end.

7. Amendment of Section 12.- In the principal Act, section 12 shall be re-numbered as sub-section (1) thereof and,-

(a) in sub-section (1) as so re-numbered, for the words beginning with the words "where such goods are sold" and ending with the words "taxable goods in the State", the following shall be substituted, namely:-

"where such goods are intended for resale or for use in the manufacture of taxable goods or for use in the execution of works contract or for use as containers or packing materials for the packing of taxable goods in the state:

Provided that where the special rebate is in respect of capital goods, the same shall be allowed over a period of three years and all the conditions and restrictions applicable to input tax credit under sub-section (2) of section 11 shall apply to the special rebate under this section also:

Provided also that where the goods in respect of which tax is payable under sub-section (2) of section 6 is sold in the State or in the course of interstate trade, in the month in which it is purchased, the special rebate allowable in respect of such goods resold or sold in the course of interstate sale shall be deducted from the Tax payable under sub-section (1) or under the provisions of the CST Act where the liability under sub-section (2) has been created in respect of such purchase:

Provided also that where the goods in respect of which tax is payable under sub-section (2) of Section 6 is sold in the State or in the course of inter-state trade or used in the manufacture of taxable goods in the month in which it is purchased, the special rebate allowable in respect of such goods resold or sold in the course of inter-state trade or used in the manufacture of taxable goods shall be deducted from the tax payable under sub-section (1) of section 6 or under the provisions of the Central Sale Tax Act, 1956 (Central Act 74 of 1956), where the liability under sub-section (2) of Section 6 has been created in respect of such purchase.

(b) after sub-section (1) as so re-numbered, the following sub-sections shall be inserted, namely:-

"(2) unregistered dealers or dealer paying presumptive tax under sub-section (5) of section 6 or dealer paying compounded tax under section 8 shall not be eligible for rebate under sub-section (1).

(3) If the rebate allowed under sub-section (1) and the input tax credit allowed under section 11 is more than the output tax for that return period, the amount by which the sum of the input tax credit and rebate under sub-section (1) is in excess of the output tax for the return period shall be carried forward to the next return period and treated in the same manner as input tax under sub-section (6) of section 11, as if such rebate were also input tax credit accrued under that section.

(4) Where rebate is claimed under sub-section (1) in respect of any goods during a return period and the goods are subsequently used, fully or partly for purposes other than those specified in the said sub-section, or has remained as unsold at the time of closure of business, in relation to such goods, the rebate claimed on such goods used otherwise or remained as unsold at the time of closure shall be the reverse tax for that return period which may be determined in the same manner as if it were a reverse tax accrued under sub-section (7) of section 11".

8. Amendment of section 13.- In the principal Act, in sub-section (2) of section 13,-

(1) for clause (iv) the following clause shall be substituted, namely:-

"(iv) (a) used or consumed in the manufacture of goods, other than those falling under the Fourth Schedule, or used as containers or as packing materials for such goods and such manufactured goods are sold in the course of export; or

(b) used or consumed in the manufacture of taxable goods or used as containers or as packing materials of such goods manufactured and such manufactured goods are sent outside the state either by way of sale in the course of inter-state trade or commerce or otherwise; or:

(2) in the second proviso, for the words "such goods re-sold or used in the manufacture", the words "such goods sent to outside the state, resold or used in the manufacture" shall be substituted.

9. Amendment of section 15.- In the principal Act, in section 15,-

(1) in sub-section (1), for the words, "two lakh rupees" the words "five lakh rupees" shall be substituted.

(2) in sub-section (2),-

(a) in clause (ii), the words "whose total turnover under the said Act for the year preceding such date was not less than the limit specified under sub-section (1)" shall be inserted at the end;

(b) in clause (vii), for the words, "non-resident dealer; and", the words "non-resident dealer" shall be substituted;

(c) in clause (viii) for the words "on behalf of any principal", the words, figures and brackets, "on behalf of any principal;

(ix) any contractor", and

(x) any State Government, Central Government, or Government of any Union Territory or any department thereof or any local authority/autonomous body" shall be substituted.

(3) after sub-section (4) the following sub-section shall be inserted, namely:-

"(5) Where a dealer whose total annual turnover is less than the limit specified under sub-section (1) and does not fall under any of the categories mentioned in sub-section (2) gets himself registered under this section, he shall, notwithstanding anything to the contrary contained in section 6, be liable to pay tax on his sale or purchase of goods as provided in this Act whatever be his total turnover".

10. Amendment of section 16.- In the principal Act, in sub-section (1) of section 16,-

(a) in items (a) and (b) of the table, for the words "three lakhs rupees" the words "five lakhs rupees" shall respectively be substituted;

(b) after the existing provisos, the following further proviso shall be inserted, namely:-

"Provided also that where a dealer liable to get registered under sub-section (1) of section 15 is also liable to get registered under the provisions of the Kerala General Sales Tax Act, 1963, (15 of 1963), notwithstanding anything contained in the said Act, he shall not be required to pay the fee prescribed under the provisions of the said Act for the year if he has paid the fee specified under this section for the said year for the total turnover both under this Act and also under the said Act."

11. Amendment of section 17.- In the principal Act, in section 17, after sub-section (3), the following sub-section shall be inserted, namely:-

"(4) where a dealer getting registered under section 15 had furnished any security in accordance with the provisions of the Kerala General Sales Tax Act, 1963 (15 of 1963) notwithstanding anything to the contrary contained in this Act the security furnished under the provision of the said Act shall be deemed to have been furnished under the provisions of this Act."

12. Amendment of section 22.- In the principal Act, in section 22,-

(1) to sub-section (1) the following proviso shall be inserted, namely:-

"Provided that the payment of any tax declared as payable as per the return shall be provisionally accepted."

(2) after sub-section (7), the following Explanation shall be inserted, namely:-

"Explanation:- for the purposes of this section and section 21, a return shall be deemed to have been received as and when the assessing authority acknowledges the receipt of the return in such manner as may be prescribed"

13. Amendment of section 23.- In the principal Act, in section 23, for sub-section (6), the following sub-section shall be substituted, namely:-

"(6) If any dealer or any other person who is required to make available any books of accounts or records for audit fails to do so without any reasonable cause or fails to prove the correctness of the stock statement, goods or the turnover or the input tax credit or the refund claimed, notwithstanding anything contained in section 11, 20, 21 and 22,-

(a) where the input tax credit or refund claimed in relation to the period covered by the audit is not proved, the claim shall be liable to be disallowed; or

(b) where the correctness of the stock statement or the turnover is not proved, the assessment for the period, the stock statement or turnover in relation to which has not been proved, shall be liable to be completed to the best of judgment, in such manner as may be prescribed."

13A. Amendment of section 24.- In the principal Act, in sub-section (1) of Section 24,-

(1) in clause (c), for the words "or refund claimed, the audit officer may", the words "special rebate or refund claimed, the audit officer may, at any time within two years from the last date of the year to which the return relates," shall be substituted;

(2) after the existing proviso the following further provisos shall be inserted, namely:-

"Provided further that where the defect in the return is only the application of incorrect rate of tax, mistake in the claim of input tax credit, special rebate or refund, no assessment under this sub-section shall be made where the dealer, at his option, files revised return and pays the balance tax along with interest under sub-section (5) of section 31 and thrice the interest as settlement fee:

Provided also that the time limit mentioned in this sub-section and the preceeding proviso shall not apply to a dealer where the claim of input tax credit, special rebate or refund made by him was on the basis of any bogus or forged document or where the claim was otherwise fraudulent".

14. Amendment of section 25.- In the principal Act, in section 25,-

(a) in sub-section (1),-

(i) for the words "input tax" wherever they occur, the words "input tax or special rebate" shall be substituted.

(ii) after the existing proviso, the following further proviso shall be inserted, namely:-

"Provided further that where the escapement is due to the application of incorrect rate of tax, no assessment under this sub-section shall be made where the dealer files revised return and pays the tax which has escaped assessment alongwith interest under sub-section (5) of section 31 and thrice the interest as settlement fee."

(2) In sub-section (3), for the words and figures "section 68", the words and figures "section 67" shall be substituted;

15. Amendment of section 30.- In the principal Act, in section 30,-

(1) in sub-section (1), for the words "at the rates specified in the Schedules", the words and figures, "at the rates specified under section 6" shall be substituted.

(2) in sub-section (2), for the words "compounded tax under section 8" the words "compounded tax under clause (a) to clause (d) of Section 8" shall be substituted.

(3) In sub-section (3), for sub-clause (i) of clause (a), the following sub-clause shall be substituted, namely:-

"(i) which is included in the First Schedule"

(4) to sub-section (3), the following provisos shall be added, namely:-

"Provided that nothing contained in this sub-section shall apply to the collection of an amount by a registered dealer towards the amount of tax already paid under this Act in respect of goods, the sale or purchase price of which is controlled by any law in force and the retail price fixed for such goods under such law is not inclusive of such tax:

Provided further that where the sale of any goods is exempted only at the point of sale by any dealer, such dealer may, notwithstanding anything contained in sub-section (1), at his option, collect tax in respect of the sale of such goods and thereupon he shall be liable to pay tax in respect of such goods".

(5) for sub-section (4), the following sub-section shall be substituted, namely:-

"(4) where a registered dealer has collected tax in respect of any goods in accordance with sub-section (1), he shall be liable to tax notwithstanding that his total turnover for the year is below the limit specified under sub-section (1) of section 6."

16. Amendment of Section 32.- In the principal Act, for sub-section (1) of section 32, the following sub-section and the proviso shall be substituted namely:-

"(1) Where the Government had granted any exemption in respect of the tax payable by any industrial unit under the Kerala General Sales Tax Act, 1963 (15 of 1963) or, the Kerala Surcharge on Taxes Act, 1957 (11 of 1957) for any specified period under any notification issued under section 10 of the KGST Act, 1963 (15 of 1963) under the Industrial policy of the State, or where any application or other proceedings is pending on the date of commencement of this Act, such exemption granted or due to be granted shall have operation only till the day preceeding the date of commencement of this Act:

Provided that the Government may, by notification, which may be subject to such conditions and restrictions as may be specified therein, order to defer the payment of the whole or any part of the tax payable by such industrial units under this Act, which shall not be more than the unavailed portion of the exemption to which such unit would have been eligible had the notification issued under the KGST Act, 1963 (15 of 1963) been in force on the date of commencement of this Act, and that the tax or taxes so deferred shall be repaid, after the expiry of the period for which such deferment is granted, in such instalments over a period of five years, in such manner as may be specified."

16A. Amendment of Section 48.- In the principal Act, in sub-section (4) of Section 48, for the words "or the transports or the owner or person in charge of the vehicle", the words "or the transporter or the owner or person in charge of the vehicle" shall be substituted.

17. Amendment of Section 49A.- In the principal Act, in section 49A for the words "An officer authorised" the words "Any officer authorised" and for the words "if such officer feels" the words if he feels" shall respectively be substituted.

17A. Amendment of section 53.- In the principal Act, for the Section 53, the following section shall be substituted, namely:-

"53. Banks to submit returns.- Every bank, including any branch of a bank or any banking institution in the State, shall submit to the assessing authority of the area, a return of all bills relating to goods discounted, cleared or negotiated by or through it, in such form, in such manner and within such time, as may be prescribed."

18. Amendment of section 55.- In the principal Act, in section 55, for the second proviso, the following proviso shall be substituted, namely:-

"Provided further that no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of,-

(a) the entire tax assessed, where the appeal is against an assessment completed under sub-section (3) of section 22; and

(b) the tax or other amounts admitted by the appellant be due or such instalment thereof as might have become payable, as the case may be, where the appeal is against an assessment completed under sub-section (6) of section 23, or under section 24 or section 25"

19. Amendment of section 67.- In the principal Act, in clause (e) of sub-section (1) of section 67, for the words "input tax credit or refund", the words "input tax credit, special rebate or refund" shall be substituted.

20. Amendment of Section 71.- In the principal Act, in clause (a) of sub-section (2) of section 71, for the words "input tax credit or refund", the words "input tax credit, special rebate or refund" shall be substituted.

21. Amendment of section 74.- In the principal Act, in sub-section (1) of section 74, for the words, figures, letters and brackets "specified in clause (a) to (e), (g) and (j) to (l) of section 71", the words, figures, letters and brackets "other than those specified under clause (e) of sub-section (1) or clause (b), (c) or (d) of sub-section (2) of section 71" shall be substituted.

22. Amendment of section 98.- In the principal Act, for sub-section (4) of section 98, the following sub-section shall be substituted, namely:-

"(4) Notwithstanding anything contained in sub-section (1), but subject to the provisions of section 32, in relation to any goods covered by this Act-

 (i) any authority appointed under the provisions of KGST Act, 1963 (15 of 1963) shall have power to initiate and complete any proceedings under the said Act for the assessment, levy, collection and recovery of tax, penalty or other amount chargeable under the said Act including that of escaped turnover or to continue any such proceedings pending at the commencement of this Act for any period prior to the date of commencement of this Act and the provisions relating to appeal, revision or review under this Act shall apply to such proceedings as if it were a proceeding completed under this Act;

(ii) any right, title, obligation or liability already acquired, accrued or incurred under the KGST Act, 1963 (15 of 1963) for any such previous period shall remain unaffected;

(iii) any application, appeal, revision or other proceedings made or preferred or initiated by any officer or authority under the said Act and pending at the commencement of this Act, shall, after such commencement be transferred to and disposed of by the officer or authority who would have had jurisdiction to entertain such application, appeal, revision or other proceedings under this Act if it had been in force on the date on which such application, appeal, revision or other proceedings was made or preferred."

"(5) Notwithstanding anything contained in sub-section (1) nothing shall affect the power of the Government to issue a notification under section 10 of the Kerala General Sale Tax Act, 1963 for a period prior to the commencement of the Kerala Value Added Tax Act, 2003.".

23. Amendment of the Schedules.- In the principal Act, for the First, Second, and Third Schedules, the following Schedules and rules of interpretation shall be substituted, namely:-

SCHEDULES

FIRST SCHEDULE ( Exempted goods )

[See Section 6(4)]

SECOND SCHEDULE

Rate 1%

[See Section 6(1)(a)]

THIRD SCHEDULE ( 4%)

[See Section 6(1)(a)]