(1) Every dealer whose total turnover for a year is not less than ten lakhs rupees and every importer or casual trader or agent of a non-resident dealer 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 or any multi-level marketing entity, their distributor and/or agent engaged in multi-level marketing, whatever be his total turnover for the year, shall pay tax on his sales or purchases of goods as provided in this Act. The liability to pay tax shall be on the taxable turnover,-
(a) in the case of goods specified in the Second and Third Schedules at the rates specified therein and at all points of sale of such goods within the State and in the case of goods specified below, at the rates mentioned in column (4), at all points of sale of such goods within the State, namely:-
Explanation:- The 'Rules of Interpretation of the Schedules' appended to the Schedules of this Act shall apply to the interpretation of the HSN codes mentioned in this clause.
(b) Omitted.
(c ) in the case of transfer of the right to use any goods for any purpose whether or not for a specified period, at the rate of five percent at all points of such transfer;
(d) in the case of goods not falling under clauses (a) or (c) at the rate of 14.5% at all points of sale of such goods within the State. Government may notify a list of goods taxable at the rate of 14.5%;
(e) in the case of transfer of goods involved in the execution of works contract where transfer is in the form of goods at the rates specified for such goods in clauses (a) or (d) above, as the case may be;
(f) In the case of transfer of goods involved in execution of works contract, where the transfer is not in the form of goods, but in some other form, at the rate of 14.5 per cent and when the transfer is in the form of goods at the rates prescribed under the respective Schedules.
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 five 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,-
(i) 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 or Funds of Local Authorities or Command Area Development Authority and OFD Works through Beneficiary Farmers' Associations or Karshaka Samithy where the total amount in respect of individual contract does not exceed ten lakhs rupees, the tax payable under clause (f) above shall be five per cent;
(ii) under the Jalanidhi Project (KRWSA), the tax payable under clause (f) above shall be four per cent irrespective of the total amount in respect of the individual contract;
and the Beneficiary Committees shall be entitled to receive payment even without taking registration under the Act.
Provided also that, where,-
(a) the sale is to or by Canteen Stores Department, Central Police Canteen, Indian Naval Canteen Service and National Cadet Corps Canteen; and
(b) the sale is by Military, Naval, Air force or by the one subsidiary canteen each that may be established by the Kerala Police in each District of the State and affiliated to the Central Police Canteen, of the goods purchased from Canteen Stores Department, Central Police Canteen or from direct suppliers authorised by them, as the case may be; and
(c) in case of motor vehicles, the sale is to Defence personnel or ex-servicemen on production of authorization duly issued by the authorized officer of the Canteen Stores Department, Indian Naval Canteen Stores or Air Force Canteen, as the case may be;
the tax payable under (a), (b) or (c) above shall, subject to such conditions and restrictions as may be prescribed, be half the rate applicable to such goods.
Provided also that in respect of sale of fuel and lubricants to foreign-going vessels, other than fishing vessels, the tax payable under clause (a) or (d) above shall, subject to conditions and restrictions as may be prescribed, be half per cent:
Provided also that where sale of goods other than petroleum products, manufacturerd in the State is to Railways, Kerala State Electricity Board, Kerala State Road Transport Corporation or Kerala Water Authority, the tax payable under clause (d) above shall, subject to such conditions and restrictions as may be prescribed, be at five percent.
provided also that sculptural statues of national leaders and social reformers shall be exempted from tax payable under clause (e) and (f) of sub-section (1) of section 6:
Provided also that the tax payable under clause (f), in respect of transfer of declared goods not in the form of goods but in some other form, shall be at the rate prescribed under the respective Schedules:
Provided also that the rate of tax on the sale of used motor vehicles shall be at 0.5 percent and that no tax is payable under sub-section (2):
Provided that the turnover relating to the sale of Liquified Natural Gas shall be exempted from tax, for the period from 1st April, 2015 to 31st March, 2016.
Provided also that cooked food and beverages served in a houseboat paying compounded tax under the Kerala Tax on Luxuries Act, 1976 (32 of 1976) shall be exempted from tax with effect from 1st April, 2006:
Provided also that the tax payable on ayurvedic cosmetic products manufactured under a drug license granted under the Drugs and Cosmetics Act, 1940 (Central Act 23 of 1940) containing added medicaments having subsidiary therapeutic or prophylactic uses and those notified under clause (d) of sub-section (1) of section 6, for the period on and from the 1st day of April, 2005 to the 12th day of November, 2009 shall be at four per cent.
Provided also that the tax on the sale of cardamom, at the point of auction only, conducted at the auction centre holding a valid license issued by the Spices Board under the Cardamom (Licensing and Marketing) Rules, 1987, shall be at the rate of two per cent:
Provided further that cooked food manufactured by the prisoners and sold by the Kerala Prison and Correctional Services Department shall be exempted from tax with effect from 1st day of April, 2011:
Provided further that in respect of cinematographic films, turnover relating to sale of 'Copyright' under clause (a) and transfer of right to use under clause (c) shall be exempted:
Provided also that the rate of tax on the sale of disposable plates and cups made of styrofoam for the financial years 2013-14 and 2014-15 shall be at five per cent.
Provided also that the rate of tax for the sale of furnace oil to Coastal Cargo Vessel as fuel, shall, subject to such conditions and restrictions as may be prescribed, be 5 per cent:
Provided also that the sale of packing materials by a registered dealer to an exporter for the purpose of use in the packing of exported goods shall be exempted from tax for the period up to 31st March, 2016, subject to the condition that the sale has been supported by 'H' Forms issued under the Central Sales Tax Act, 1956 (Central Act 74 of 1956), by such exporting dealer and tax, if any, paid shall not be refunded:
Provided also that the rate of tax on works contract of supply and installation of solar energy devices, equipments and plants shall be one per cent from 1st April, 2013 and tax, if any, paid at higher rate shall not be refunded.
Provided also that the goods specified in item (1) of serial number 134 of List A of the Third Schedule shall be exempted from tax for the period from 20th December, 2014 to 31st March, 2015.
Provided also that the rate of tax of Mobile Phone Charger sold along with Mobile Phone in a sealed pack shall be at the rate applicable to the goods specified in the Third Schedule from 1st April 2005:
Provided also that the rate of tax on 'bakery shortening' included under the Chapter 15 the Schedule to the Customs Tariff Act, 1975 (Central Act 51 of 1975) with the HSN code 1517.90. shall be at the rate applicable to the goods in the Third Schedule, from 1st April, 2005 to 22nd February. 2017.
Notwithstanding anything contained in the aforementioned proviso, tax if any paid, shall not be refunded.
(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 and he shall be eligible for input tax credit.
(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.
(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) ;
Provided that notwithstanding anything contained in clause (f) of section 8, a dealer paying compounded tax for the goods mentioned in that clause, shall not be liable to pay tax under this sub-section on such goods with effect from 1st April. 2013.
(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 five per cent:
(c) every awarder, not being a Government department or Local Authority, who purchases taxable goods from any person, other than a registered dealer, within the State for execution of works contract and issues the same for incorporation in the work, without including its value in the gross contract amount, shall pay tax on the purchase turnover of such goods at the rates specified under sub-section (1), if the cost of the work including the value of materials supplied by the awarder exceeds one crore rupees.
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.
Provided further that Khadi and Village Industrial Units manufacturing splints and veneers shall not be liable to tax under this sub-section on the turnover of purchase of softwood effected from unregistered dealers for the years 2005-06 and 2006-07.
(3) Goods specified in the Fourth Schedule shall be outside the purview of this Act.
(4) Goods specified in the first schedule shall be exempted from tax.
(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 sixty 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 sixty lakh rupees during the year preceding the year to which such option relates.
Provided also that a dealer shall not be liable to pay presumptive tax under this sub section, if his total turnover is less than ten lakh rupees.
Provided also that dealers covered under this sub-section whose total turnover for a year is below rupees twenty lakhs, may pay a lump sum amount of rupees three thousand annually as presumptive tax, and the payment shall be at the rate of rupees seven hundred and fifty per quarter along with a statement as may be prescribed. Such dealers shall also file an annual declaration as may be prescribed.
Provided also that notwithstanding anything contained in the Act or rules made thereunder if the turnover of a dealer, who opted for payment of tax under this sub-section has exceeded the turnover limit during the course of an year, he shall be eligible for input tax credit on the turnover in excess of sixty lakh rupees.
Note:- The sixth proviso shall be deemed to have come into force on and from the 1st day of April, 2005 irrespective of any amendments made in the turnover limit specified in this sub-section.
Explanation-I :- "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.
Explanation II.- For the purpose of this sub-section, total turnover of a dealer shall not include the turnover of sale of medicines sold under first proviso to clause (e) of section 8 and the turnover of sale of goods covered under the Schedule to the Kerala General Sales Tax Act, 1963 (15 of 1963).
Note.- It shall be deemed to have come into force on the 1st day of April, 2005.
(6) Notwithstanding anything contained in sub-section (1), where goods sold are contained in containers or are packed in any packing materials, the rate of tax and the point of levy applicable to such containers or packing materials, as the case may be, shall, whether the price of the containers or the packing materials is charged separately or not, be the same as those applicable to goods contained or packed, and in determining turnover of the goods, the turnover in respect of the containers or packing materials shall be included therein:
Provided that where the sale or purchase of goods contained in any containers or packed in any packing materials is exempted from tax, then, the sale or purchase of such containers or packing materials shall also be exempted from tax.
Explanation:- For the purposes of sub-section (6), the word "containers" includes gunny bags, tins, bottles or any other containers.
(7) Notwithstanding anything contained in sub-section (1),-
(a) any authorized retail or wholesale distributor dealing 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 building materials, industrial inputs, plant and machinery including components, spares, tools and consumables in relation thereto to any developer or industrial unit or establishments situated in any Special Economic Zone in the State for setting up the unit or use in the manufacture of other goods shall, subject to such conditions or restrictions, as may be prescribed, be exempted from tax.
Provided that the exemption covered by this clause shall be applicable to a deemed sale involved in a works contract executed through a sub-contractor also.
Explanation.- Building materials referred to in this clause shall include basic building materials and other goods essentially required to make the building effectively functional and capable of being used by the unit, depending on the activity carried out by the said unit.
(c) sale of medicines and drugs falling under the Third Schedule, in respect of which tax had been paid under the Kerala General Sales Tax Act, 1963 (15 of 1963) and which are held as opening stock on the 1st day of April, 2005 shall, subject to conditions and restrictions, as may be prescribed, be exempted from tax.
(8) The Rules of Interpretation of the Schedules of this Act shall be as set out in the Appendix.