(1) There shall be levied and paid to the State Government a tax on the entry, in the course of business of a dealer, of the goods specified in Schedule-II, into each local area for consumption, use or sale therein.

(2) The tax under sub-section (1) shall be payable on the taxable turnover of a dealer at the rates specified in column (3) of Schedule-II and such tax shall be paid by every dealer.

(3) Every dealer who brings any goods into local area for use in manufacturing, processing, conversion, job-work, assembling or packing of goods and such goods sold inside the State otherwise than Value Added Tax sales or sent outside the State otherwise than in the course of inter-state sale or in the course of export out of territory of India, shall be liable to pay tax under this Act.

(4) Notwithstanding anything contained in sub-sections (1), (2) or (3), no tax under this section shall be levied-

(i) in respect of the goods specified in Schedule-I;

(ii) in respect of the goods on which Value Added Tax has been paid or has become payable to the State, except goods specified at Sr. Nos. 1(a) of Schedule-II when such goods are used in manufacturing, processing, conversion, job-work, assembling, packing or captive generation of power;

(iii) in respect of goods specified in Schedule-II, which after entry into a local area are sold in the same form outside the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India;

(iv) in respect of goods specified in ScheduleII which after entry into local area are used or consumed in manufacturing, processing, conversion, job-work, assembling or packing of goods and such goods are sent outside the State by way of sale in the course of inter-state sale or in the course of export out of territory of India; and

(v) in respect of goods on the entry of which it is proved to the satisfaction of the Assessing Authority that such goods have already been subjected to tax under this Act:

Provided that if any dealer who has effected entry of any goods specified in Schedule-II into a local area for the purpose of re-sale, consumes such goods in any form or deals with such goods in any other manner, except reselling the same, he shall be liable to pay tax in respect of such goods:

Provided further that notwithstanding anything contained in this Act, where a dealer liable to pay tax under this Act in the course of his business, purchases goods from a person or a dealer other than a registered dealer who has effected entry of such goods into the local area prior to such purchase, the tax shall be paid by the dealer who has purchased such goods.

Explanation.- For the purpose of this sub-section the entry of goods into a local area for consumption or use therein in the execution of a works contract shall be deemed to be the entry of goods in the course of business and the person who has effected the entry of such goods into a local area shall be deemed to be a dealer.

(5) The State Government may, by notification, add to or delete from the Schedule-I or Schedule-II any goods, or otherwise amend these Schedules, including rates of tax, and thereupon the Schedules shall be deemed to have been amended accordingly.