TaxTMI 
TaxTMI 
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)
Section of purchase
01 May 2015 
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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. (AI Summary)
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. (AI Summary)