Section of purchase

[Guest]

What is purchase u/s 3 and u/s 5(3).What is turnover of purchases taxable u/s 12(1)(a) and 12(1)(b)

[YAGAY andSUN]

Dear Ranjit

You would have to read all the relevant section simultaneously and Jointly to understand the meaning of legal provision of these section

12. Contingent liability to pay tax on purchase.- (1) Every registered dealer , other than those enjoying composition under sub-section (3), sub-section (3A) or sub-section (3B) or sub-section (6), of section 16 or sub-section (4) of section 18, shall, in addition to the tax payable under any other provisions of this Act, be liable to pay tax on that part of his turnover of purchases which represents-

(a) purchases of goods which are not meant for the purposes specified in clause (a) to
clause (i), of sub-section (4) of section 22; or
(b) purchases of goods specified in the Negative List appended to section 22 where no input tax credit or input tax rebate is allowed.
(2) Every registered dealer enjoying composition under any of the sub-sections of section 16 or under sub-section (4) of section 18 , shall, in addition to tax payable under any other provisions of this Act, be liable to pay tax on turnover of purchases where his turnover of sales or contractual transfer price , as the case may be, in the previous year , or in case of a dealer registered in a year, from the start of the year, is more than rupees fifty lakh.

Regards,

YAGAY and SUN

AI Summary

Tax on purchases: dealers may be liable for tax on certain purchases and composition dealers if turnover exceeds threshold. Section 12 imposes a contingent liability on registered dealers to pay tax on that part of their turnover of purchases consisting of (a) purchases not for the purposes set out in section 22(4)(a)-(i), and (b) purchases in the Negative List where no input tax credit or rebate is allowed. Subsection (2) makes dealers enjoying composition liable for tax on turnover of purchases where their prior year turnover of sales or contractual transfer price exceeds the statutory threshold.