Section 8:
Rates of tax on sales in the course of inter-State trade or commerce.
1[
2[(1) Every dealer,
who in the course of inter-State trade or commence, sells to a registered dealer goods of the description
referred to in sub-section (3), shall be liable to pay tax under this Act, which shall be three per cent. of his
turnover or at the rate applicable to the sale or purchase of such goods inside the appropriate State under
the sales tax law of that State, whichever is lower:
Provided that the Central Government may, by notification in the Official Gazette, reduce the rate of
tax under this sub-section.
(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates
to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1), shall
be at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales
tax law of that State.
Explanation.--For the purposes of this sub-section, a dealer shall be deemed to be a dealer liable to
pay tax under the sales tax law of the appropriate State, notwithstanding that he, in fact, may not be so
liable under that law.
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(3) 4[The goods referred to in sub-section (1),--]
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6[(b) are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing for sale of goods specified under clause (d) of section 2;]
(c) are containers or other materials specified in the certificate of registration of the registered
dealer purchasing the goods, being containers or materials intended for being used for the packing of
goods for sale;
(d) are containers or other materials used for the packing of any goods or classes of goods
specified in the certificate of registration referred to in 7*** clause (b) or for the packing of any
containers or other materials specified in the certificate of registration referred to in clause (c).
8[(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or
commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed
manner a declaration duly filled and signed by the registered dealer to whom the goods are sold
containing the prescribed particulars in a prescribed form obtained from the prescribed authority:
Provided that the declaration is furnished within the prescribed time or within such further time as
that authority may, for sufficient cause, permit.]]
9[(5) Notwithstanding anything contained in this section, the State Government may,
10[on the
fulfillment of the requirements laid down in sub-section (4) by the dealer,] if it is satisfied that it is
necessary so to do in the public interest, by notification in the Official Gazette and subject to such
conditions as may be specified therein direct,--
(a) that no tax under this Act shall be payable by any dealer having his place of business in the
State in respect of the sales by him, in the course of inter-State trade or commerce 10[to a registered
dealer 11***], from any such place of business of any such goods or classes of goods as may be
specified in the notification, or that the tax on such sales shall be calculated at such lower rates than
those specified in sub-section (1)
11*** as may be mentioned in the notification;
(b) that in respect of all sales of goods or sales of such classes of goods as may by specified in the
notification, which are made, in the course of inter-State trade or commerce 10[to a registered
dealer 11***], by any dealer having his place of business in the State or by any class of such dealers as
may be specified in the notification to any person or to such class of persons as may be specified in
the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at
such lower rates than those specified in sub-section (1) or sub-section (2) 11*** as may be mentioned
in the notification.
12[(6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by
any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or
commerce to a registered dealer for the purpose of setting up, operation, maintenance, manufacture,
trading, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for
use as packing material or packing accessories in a unit located in any special economic zone or for
development, operation and maintenance of special economic zone by the developer of the special
economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate
and maintain such special economic zone by the authority specified by the Central Government in this
behalf.]
(7) The goods referred to in sub-section (6) shall be the goods of such class or classes of goods as
specified in the certificate of registration of the registered dealer referred to in that sub-section.
(8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course
of inter-State trade or commerce unless the dealer selling such goods furnishes to the 13
prescribed
authority referred to in sub-section (4) a declaration in the prescribed manner on the prescribed form
obtained from the authority specified by the Central Government under sub-section (6) duly filled in and
signed by the registered dealer to whom such goods are sold.
Explanation.--For the purposes of sub-section (6), the expression special economic zone has the
meaning assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise
Act, 1944 (1 of 1944).]
Notes:
1. Subs. by Act 31 of 1958, s. 5, for sub-sections (1), (2), (3) and (4) (w.e.f. 1-10-1958).
2. Subs. by Act 16 of 2007, s. 4, for sub-sections (1) and (2) (w.e.f. 1-4-2007).
3. Sub-section (2A) omitted by Act 20 of 2002, s. 150 (w.e.f. 13-5-2002).
4 Subs. by Act 16 of 2007, s. 4, for The goods referred to in clauses (b) of sub-section (1) (w.e.f. 1-4-2007).
5. Cl. (a) omitted by Act 8 of 1963, s. 2 (w.e.f. 1-4-1963).
6. Subs. by Act 13 of 2021, s. 150, for clause (b) (w.e.f. 28-3-2021).
7. The words, brackets and letter clause (a) or omitted by Act 8 of 1963, s. 150 (w.e.f. 1-4-1963).
8. Subs. by Act 16 of 2007, s. 4, for sub-section (4) (w.e.f. 1-4-2007).
9. Subs. by Act 61 of 1972, s. 5, for sub-section (5) (w.e.f. 1-4-1973).
10. Ins. by Act 20 of 2002, s. 152 (w.e.f. 13-5-2002).
11. The words or the Government omitted by Act 16 of 2007, s. 4 (w.e.f. 1-4-2007).
12. Subs. by Act 23 of 2004, s. 118, for sub-section (6) (w.e.f. 10-09-2004).
13. Subs. by Act 23 of 2004, s. 118, for certain words (w.e.f. 10-9-2004).