The Bihar Value Added Tax Act, 2005

(1) This Act may be called the Bihar Value Added TaxAct, 2005. (2) It shall extend to the whole of the State of Bihar. (3) It shall be deemed to have come into force on the 1st day of April, 2005.

In this Act, unless the context otherwise requires, (a) "Assessing Authority" means any of the authorities referred to in section 10 who is directedunder sub-section (2) of that section to exercise or perform all or any of the powers and functionsconferred on an Assessing Authority under this Act; (b) "Assistant Commercial Taxes Officer" means an Assistant Commercial Taxes Officerappointed under sub-section (1) of section 10; (c) "Assistant Commissioner of Commercial Taxes" means an Assistant Commissioner ofCommercial Taxes and Additional Assistant Commissioner of Commercial Taxes appointed undersub-section (1) of section 10; (d) "business" includes, (i) any trade, commerce, manufacture or any adventure or concern in the nature of trade,commerce, manufacture, whether or not such trade, commerce, manufacture, adventure or concernis carried on with a motive to make gain or profit and whether or not any gain or profit accruesfrom such trade, commerce, manufacture, adventure or concern; (ii) any transaction of sale or purchase in connection with, or incidental or ancillary to, suchtrade, commerce, manufacture, adventure or concern; and (iii) any transaction in connection with, or incidental or ancillary to, the commencement orclosure of such business; (e) "capital goods" means plant, machinery and equipment used in trade or manufacturing of goods; (f) "casual trader" means a person, who, whether as principal, agent or in any other capacityundertakes occasional transactions in the nature of business involving buying, selling, supply ordistribution of goods or conducting any exhibition-cum-sale in the State of Bihar, whether for cash,deferred payment, commission, remuneration or other valuable consideration; (g) "Commercial Taxes Officer" means a Commercial Taxes Officer appointed undersub-section (1) of section 10; (h) "Commissioner" means the Commissioner of Commercial Taxes appointed undersub-section (1) of section 10 or Additional Commissioner of Commercial Taxes and any other officerupon whom the State Government may, by notification, confer all or any of the powers and duties ofthe Commissioner under this Act; (i) "dealer" means any person who, whether regularly or otherwise, in the course of business, buys,sells, supplies, distributes or does anything incidental to such buying, selling, supplying or distributing of goods, directly or indirectly, whether for cash, or for deferred payment or forcommission, remuneration or other valuable consideration and includes-- (A) a local authority; (B) a Hindu undivided family; (C) a company, or any society (including a co-operative society), club, firm, association ofpersons or body of individuals, whether incorporated or not, which carries on such business; (D) a society (including a co-operative society), club, firm or association which buys goodsfrom, or sells, supplies or distributes goods to its members; (E) an industrial, commercial, banking or trading undertaking, whether or not, of the CentralGovernment or of any of the State Governments or of a local authority; (F) a casual trader; (G) a commission agent, broker, factor, a del credere agent, an auctioneer or any othermercantile agent, by whatever name called, who carries on the business of buying, selling,supplying or distributing goods on behalf of the principal. Explanation.-- Every person who acts as an agent on behalf of a dealer residing outside the Stateof Bihar and buys, sells, supplies or distributes goods in the State or acts on behalf of such dealeras-- (a) a commission agent, broker, factor, a del credere agent, an auctioneer or any othermercantile agent, by whatever name called; or (b) an agent for handling goods or documents of title to goods; or (c) an agent for the collection or the payment of the sale price of goods or as a guarantorfor such collection or payment; or (d) a local branch of a firm or company situated outside the State, shall be deemed to be adealer for the purposes of this Act; (j) "declared goods" means goods declared under section 14 of the Central Sales Tax Act, 1956 (74of 1956) to be of special importance in inter-State trade or commerce; (k) "Deputy Commissioner of Commercial Taxes" means the Deputy Commissioner ofCommercial Taxes or Additional Deputy Commissioner of Commercial Taxes appointed undersub-section (1) of section 10; (l) "goods" means all kinds of movable property including livestock, computer software, anyelectronic chip used for the purpose of storing or transmitting data or voice and all materials,commodities and articles (as such or in some other form) but excluding newspapers, electricity,actionable claims, stocks, shares or security. Explanation.-- For the purposes of this clause, materials, commodities and articles,-- (i) attached to or forming part of an immovable property which are agreed to be severed underthe contract of sale; or (ii) sold or supplied as such or in some other form in the execution of works contract, lease orhire purchase, shall be deemed to be goods within the meaning of this clause; (m) "goods carrier" means a motor vehicle, vessel, boat, animal and any form of conveyance usedfor carrying goods; (n) "Government" means the Government of the State of Bihar; (o) "gross turnover" means,-- (i) for the purposes of levy of tax on sales, in respect of sale of goods, aggregate of sale pricesreceived or receivable by a dealer on sales and includes sale of goods made outside the State ofBihar or in the course of inter-State trade or commerce or export but does not include sale price ofgoods which have borne the incidence of tax on purchases under sections 4 and 5; (ii) for the purposes of levy of tax on purchase, aggregate of purchase prices paid or payableby a dealer during any given period in respect of purchase of goods or class or description of goodswhich are liable to tax under sections 4 and 5; and (iii) for the purposes of section 3, the aggregate of the amounts under sub-clauses (i) and (ii)above. Explanation.--For the purposes of this clause, the amount received by a dealer on account of pricevariation or price escalation in respect of sale or supply of goods shall be deemed to form part of grossturnover of the financial year during which it is actually received; (p) "importer" means a dealer who brings any goods into the State of Bihar or to whom any goodsare despatched from any place outside the State of Bihar; (q) "input" means goods (excluding goods specified in Schedule IV) purchased in the course ofbusiness-- (a) for re-sale; (b) for use in manufacture of goods including packing materials; (c) for use as capital goods as defined in clause (e); (r) "input tax" means the amount paid or payable by a registered dealer, by way of tax under thisAct, in respect of purchase of any taxable goods; (s) "Inspector" means an Inspector of Commercial Taxes appointed under sub-section (3) ofsection 10; (t) "month" means a calendar month; (u) "notification" means a notification published in the Official Gazette; (v) "output tax" means the tax charged or chargeable in respect of sale or supply of goods made bya registered dealer; (w) "place of business" means any place where a dealer, either usually or for the time being,manufactures, sells or purchases goods or keeps accounts of stocks, manufactures, sales or purchases,execution of works contracts, hire purchase contracts and lease contracts or any other place wherebusiness activity takes place and includes-- (i) the place of business of an agent, in case of a dealer carrying on business through an agent;or (ii) any place or building in which a person carrying on a business, keeps any of his books ofaccount, documents, stocks or other things, relating to his business; (x) "prescribed authority" means the authority prescribed by the rules made under this Act toexercise powers conferred under different provisions and perform such functions as may be conferredby or under this Act; (y) "prescribed" means prescribed under the rules made under this Act; (z) "purchase price" means the amount paid or payable by a dealer as a valuable consideration inrespect of purchase of goods and includes-- (i) any amount charged for anything done by the vendor in respect of the goods at the time of,or before, the delivery thereof; (ii) transport costs or freight, if any; (iii) trade commission, if any, by whatever name called; (iv) clearing, forwarding and handling charges, if any; (v) insurance charges, if any; (vi) taxes or duties under any law for the time being in force (other than tax paid or payableunder this Act) by whatever name called, if any; (vii) cost of packing, if any; and (viii) the amount paid or payable by the purchaser by way of non-refundable deposit, whetherby way of a separate agreement or not, in connection with or incidental or ancillary to, the saidpurchase of goods; (za) "quarter" means the quarter ending on the 30th June, 30th September, 31st December and 31stMarch and the expression "quarterly" shall be construed accordingly; (zb) "registered dealer" means a dealer in possession of a valid certificate of registration granted tohim under section 19 or under the provisions of the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), asit stood before its repeal by section 94; (zc) "sale" with all its grammatical variations and cognate expressions means any transfer ofproperty in goods for cash or deferred payment or for other valuable consideration and includes-- (i) a transfer, otherwise than in pursuance of a contract, of property in any goods for cash,deferred payment or other valuable consideration; (ii) a transfer of property in goods (whether as goods or in some other form) involved in theexecution of a works contract; (iii) a delivery of goods on hire purchase or any system of payment by instalments; (iv) a transfer of the right to use any goods for any purpose (whether or not for a specifiedperiod) for cash, deferred payment or other valuable consideration; (v) a supply of goods by any unincorporated association or body of persons to a member thereoffor cash, deferred payment or other valuable consideration; (vi) a supply, by way of or as part of any service or in any other manner whatsoever, of goods,being food or any other article for human consumption or any drink (whether or not intoxicating)where such supply or service is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the personmaking the transfer, delivery or supply and purchase of those goods by the person to whom such transfer,delivery or supply is made; (zd) "sale price" means the amount payable to a dealer as valuable consideration for the sale orsupply of any goods and includes-- (i) any amount charged for anything done by the vendor in respect of the goods at the time of,or before, the delivery thereof; (ii) transport costs or freight, if any; (iii) trade commission, if any, by whatever name called; (iv) clearing, forwarding and handling charges, if any;(v) insurance charges, if any; (vi) taxes or duties levied under any law for the time being in force (other than tax paid orpayable under this Act) by whatever name called, if any; (vii) cost of packing, if any; and (viii) the amount received or receivable by the seller by way of non-refundable deposit, whetherby way of a separate agreement or not, in connection with or incidental to or ancillary to, the saidsale of goods; Explanation I.-- Where goods are sold on hire purchase or any system of payment by instalments,the sale price of such goods shall be inclusive of insurance charges, interest and hire charges and suchother charges related to hire purchase or any system of payment by instalments. Explanation II.-- Where goods are sold by way of transfer of right to use such goods, the sale pricethereof shall be the amount of valuable consideration received or receivable by the transferor for suchtransfer; (ze) "tax" means the tax leviable and payable under this Act; (zf) "taxable goods" means all goods in respect of which tax is payable under section 14; (zg) "Tribunal" means the Tribunal constituted under sub-section (1) of section 9; (zh) "works contract" means any agreement for carrying out for cash or deferred payment or othervaluable consideration, the construction, fitting out, improvement or repair of any building, road, bridgeor other immovable or movable property; (zi) "year" means the financial year.

(1) Every dealer who is registered under the Bihar Finance Act, 1981 (Bihar Act 5of 1981), as it stood before its repeal by section 94, shall be liable, on or after the commencement of thisAct, to pay tax under this Act on sale or purchase, made by him. (2) Every dealer, to whom sub-section (1) does not apply, shall be liable to pay tax on sale or purchase,as the case may be, from the date on which his gross turnover, during a period not exceeding twelve months,first exceeded five lakh rupees. (3) Notwithstanding anything contained in sub-section (1) or sub-section (2) but subject to the otherprovisions of this Act, every dealer,-- (a) being an importer or a manufacturer; or (b) who is required to file a return under the Income-tax Act, 1961 (43 of 1961); or (c) who holds any licence under the Explosives Act, 1884 (4 of 1884), or the Bihar Excise Act,1915 (Bihar and Orissa Act 2 of 1915), or the Drugs and Cosmetics Act, 1940 (23 of 1940), or theEssential Commodities Act, 1955 (10 of 1955) or the Mines and Minerals (Development andRegulation) Act, 1957 (67 of 1957); or (d) being a corporation, constituted under any law for the time being in force or a companyincorporated under the Companies Act, 1956 (1 of 1956), or, is registered under the Central Sales TaxAct, 1956 (74 of 1956); or (e) whose place of business is located inside the market yard established under the BiharAgriculture Produce Market Act, 1960 (Bihar Act 16 of 1960); or (f) who fulfils the following two conditions, namely:-- (i) uses a telephone in his place of business or has a mobile telephone; and (ii) the receipts or payments of whose business, either wholly or in part, are transacted throughany bank, shall be liable to pay tax on sale or purchase, as the case may be, with effect from the date of the first saleof any taxable goods made by him. (4) Every dealer who has become liable to pay tax under sub-sections (1), (2) and (3) shall, subject tothe provisions of sub-section (5), cease to be so liable after the expiry of twelve consecutive months fromthe date he either closes or discontinues his business or entirely transfers his business to another person. (5) A registered dealer shall, within a period of twelve consecutive months, pay tax on the stock ofgoods remaining with him on the date with effect from which he closes or discontinues his business: Provided that the Commissioner may, after recording the reasons, extend the period of twelveconsecutive months if the goods are held in stock beyond the said period of twelve months because ofreasons beyond the control of the dealer. (6) Notwithstanding anything contained in sub-section (1) or sub-section (2) or sub-section (3), whereany person who, is, or was, less than six months earlier, a member of the partnership firm, concern or Hinduundivided family, which is, or was, less than six months earlier, liable to pay tax, starts a new business,either singly or jointly with other persons, or joins other business, partnership firm or concern, tax asaforesaid, shall likewise be payable on sales and purchases made from such business, partnership firm orconcern, on and from the date the person starts or joins it, unless the liability in respect of such business,partnership firm or concern has arisen from an earlier date under the said sub-sections. (7) The tax for each year or any part thereof, may, with the previous approval of the Commissioner, beestimated and collected in advance, in the manner prescribed, during a year, in such instalments as may befixed by the prescribed authority. (8) For the purposes of sub-section (7), the prescribed authority may require the dealer to furnish anadvance estimate of his taxable turnover for that year or any part thereof and may provisionally determinethe amount of tax payable by the dealer in respect of the year or any part thereof and thereupon the dealershall pay the amount so determined by such date as may be fixed by such authority.

Subject to the provisions of sections 6 and 7, every dealer liable to pay taxunder section 3, who purchases goods in circumstances in which no tax on sales is payable or has been paidon the sale price of such goods and either consumes such goods in the manufacture of other goods for saleor otherwise disposes of such goods in any manner other than by way of sale in the State or sale in thecourse of inter-State trade or commerce, shall be liable to pay tax on the purchase price of such goods atthe same rate at which it would have been leviable on the sale price of such goods under section 14.

Where a dealer purchases any taxable goodsfrom any person within the State of Bihar, and such person is not a registered dealer and the said goods areused as capital assets anytime after such purchase, there shall be levied, a tax on the purchase price of suchpurchases at the rate at which tax on sales is leviable on the said goods.