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13. Input tax credit.
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| (1) |
Subject to provisions of this Act, dealers referred to in the following clauses and holding valid registration certificate under this Act, shall, in respect of taxable goods purchased from within the State and mentioned in such clauses, subject to conditions given therein and such other conditions and restrictions as may be prescribed, be allowed credit of an amount, as input tax credit, to the extent provided by or under the relevant clause:
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| (a) |
Subject to conditions given in column 2, every dealer liable to pay tax, shall, in respect of all taxable goods except non-vat goods, capital goods and captive power plant, where such taxable goods are purchased on or after the date of commencement of this Act, be allowed credit of the amount, as input tax credit, to the extent provided in column 3 of the table below:
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Table
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Serial No.
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Conditions
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Extent of amount of Input tax credit
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(1)
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(2)
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(3)
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| 1. |
If purchased goods are re-sold-
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Full amount of input tax
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| (i) |
inside the State, or |
| (ii) |
in the course of inter-state trade or commence; or
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| (iii) |
in the course of the export of the goods out of the territory of India.
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| 2. |
If purchased goods are used in manufacture of -
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Full amount of input tax
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| (i) |
any goods except non-vat goods and where such manufactured goods are sold in the course of the export of the goods out of the territory of India; or
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| (ii) |
any taxable goods except non-vat goods and where such manufactured goods are sold either inside the State or in the course of inter-state trade or commerce
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| 3. |
If purchased goods are – |
Partial amount of input tax, which is in excess of four percent of the purchase price on which the dealer has paid tax either to the registered selling dealer or to the State Government
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| (i) |
transferred or consigned outside the State otherwise than as a result of a sale; or
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| (ii) |
used in manufacture of any taxable goods except non-vat goods and such manufactured goods are transferred or consigned outside the State otherwise than as a result of a sale.
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| (b) |
Input Tax Credit of full amount of input tax shall be allowed to every dealer, liable to pay tax, in respect of capital goods purchased on or after the date on which dealer becomes liable for payment of tax under this Act, if such goods are to be used in,- |
| (i) |
manufacture of any taxable goods except non-vat goods and where such manufactured goods is,-
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| A- |
sold within the State or in the course of inter-state trade or commerce or in the course of the export of the goods out of the territory of India; or
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| B- |
transferred or consigned outside the State otherwise than as a result of a sale; or
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| (ii) |
manufacture of any exempt goods except non-vat goods and where such manufactured goods are sold in the course of the export of the goods out of the territory of India; or
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| (iii) |
generation of electrical energy, where such energy is used for the manufacture of any taxable goods other than non-vat goods and such manufactured goods is,-
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| A- |
sold within the State or in the course of inter-state trade or commerce or in the course of the export of the goods out of the territory of India; or
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| B- |
transferred or consigned outside the State otherwise than as a result of a sale; or
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| (iv) |
generation of electrical energy where such energy is used for the manufacture of any exempt goods and such exempt goods is sold in the course of export of the goods out of the territory of India;
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and the amount of input tax shall be computed and be claimed in prescribed manner.
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Explanation: For the purpose of this clause,- |
| (a) |
if 90 % of electrical energy generated is consumed for the purpose referred to in sub-clauses (iii) and (iv), 100 % Input Tax may be claimed and be allowed as Input Tax Credit,
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| (b) |
the expression 'generation of electrical energy' shall mean generation of electrical energy by using captive power plant including repairing and maintenance thereof.
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| (c) |
Subject to conditions mentioned in column 2 of the table under clause (a), every dealer, who is liable to pay tax on January 1, 2008 shall, in respect of all taxable goods except non-vat goods, capital goods and captive power plant, where such goods have been purchased within a period of six months ending on the date of commencement of this Act and where such goods-
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| (i) |
are held in opening stock on January 1, 2008 in the same form and condition in which they were purchased; or |
| (ii) |
have been used in manufacture of finished or semi-finished goods (in the process of manufacture of taxable goods except non-vat goods) or finished taxable goods, except non-vat goods and such finished or semi-finished goods are held in opening stock on January 1, 2008; and
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| (iii) |
have suffered levy of tax under the erstwhile Act, be allowed credit of partial or full, as provided in column 3 against relevant entry of the said table, amount of input tax as input tax credit and for this purpose amount of input tax shall be computed in the prescribed manner.
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| (d) |
Subject to conditions mentioned in column 2 of the table under clause (a), every dealer, who becomes liable to pay tax on a date after January 1, 2008, shall, in respect of all taxable goods, except non-vat goods, capital goods and captive power plant, where such taxable goods have been purchased on or after January 1, 2008 but within a period of six months ending on the day preceding the date on which such dealer has become liable to pay tax and -
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| (i) |
are held in opening stock, on the date on which the dealer has become liable to pay tax, in the same form and condition in which they were purchased;
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| (ii) |
have been used in manufacture of semi-finished goods (in the process of manufacture of taxable goods except non-vat goods) or finished taxable goods, except non-vat goods and such semi-finished or finished goods as are held in opening stock on the date on which the dealer has become liable to pay tax; or
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| (iii) |
have been purchased from a registered dealer after obtaining sale invoice bearing name and address of purchasing dealer, be allowed credit of partial or full, as provided in column 3 against relevant entry of the said table, amount of input tax as input tax credit and for this purpose amount of input tax shall be computed in the prescribed manner.
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| (e) |
Every dealer who is liable to pay tax and who opts for payment of tax or lump sum under provisions of section 6, shall, in respect of all taxable goods, except non-vat goods, capital goods and captive power plant, which are held in stock at the end of the period during which provisions of section 6 remain applicable, be allowed credit of full or partial amount of input tax or deemed input tax, as the case may be, in accordance with provisions of clauses (a) to (d) above, as may be applicable:
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| (f) |
Notwithstanding anything to the contrary contained in this sub-section where goods purchased are resold or goods manufactured or processed using or utilizing such purchased goods are sold, at the price which is lower than -
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| (i) |
purchase price of such goods in case of resale; or |
| (ii) |
cost price in case of manufacture, |
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the amount of input tax credit shall be claimed and be allowed to the extent of tax payable on the sale value of goods or manufactured goods.
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Provided that unless the State Government, in exercise of its powers under second proviso of sub-section (1) of section 4, issues notification prescribing rate of tax and point of tax in respect of sale of sugar or textile referred to therein, no facility of input tax credit, in respect of goods purchased for use in manufacture of said goods, shall be allowed under any of the aforesaid clauses.
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Explanation: For the purpose of this sub-section, for entry against serial no. 1 of the table under clause (a), re-sale of goods includes transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract.
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| (2) |
Notwithstanding anything to the contrary in any provision of sub-section (1) of this section, credit of full or partial amount of input tax, in respect of all taxable goods, may be allowed to developer, co-developer and units established in Special Economic Zone for authorized operations subject to such conditions as may be specified in the notification issued by the state government.
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Explanation -For the purposes of this sub-section the word "co-developer" or "developer" and expressions "Special Economic Zone" or "authorized operations" shall have the meanings assigned to them in the Special Economic Zones Act, 2005.
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| (3) |
(a) |
Where purchased goods are to be used or disposed of partially for the purpose specified in clause (a) of sub-section (1) or otherwise, the input tax credit may be claimed and be allowed proportionate to the extent they are used or disposed of for the purposes specified in such clause,
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| (b) |
Subject to the provisions of this section where during process of manufacture of vat goods, exempt goods and non vat goods except as by product or waste product are produced, the amount of input tax credit may be claimed and be allowed in proportion to the extent they are used or consumed in manufacture of taxable goods other than non vat goods and exempt goods
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Explanation:- For the purpose of this subsection the "exempt goods" shall include taxable goods other than non vat goods, which are disposed of otherwise than by way of sale within the State or in the course of inter-State trade or commerce or sale in the course of export of goods out of the territory of India or sale out side the State.
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| (4) |
Except as provided otherwise in any provision of this Act or the rules framed thereunder, in respect of purchase of any goods in respect of which facility of input tax credit is admissible, input tax credit of the full amount of input tax can provisionally be claimed on the date on which tax invoice related to such goods is received by the dealer and where dealer himself is liable to pay tax in respect of purchase of any goods, on the date on which amount of tax payable is accounted for by the dealer in the account of tax payable by him and possesses the proof of payment of tax on the turnover of purchase liable to tax.
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| (5) |
Where a dealer has claimed input tax credit in respect of any goods under sub-section (4), but such goods; or goods manufactured by using such goods; or goods packed by using or consuming such goods, are consigned outside the State or disposed of or dispossessed in a manner for which facility of input tax credit is not admissible or such facility is admissible for partial amount of input tax, the amount which is the difference, of the full amount of input tax and admissible amount of input tax credit, shall be deducted from the amount of the input tax credit, already claimed by the dealer by debiting such amount into the account of input tax credit maintained by him.
Provided that before debiting the amount of input tax credit reasonable opportunity of being heard shall be given to the dealer.
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| (6) |
In the circumstances referred to in sub-section (5), the amount of difference of full amount of input tax and admissible amount of input tax credit, shall be debited by the dealer into the account of input tax credit maintained by him on the day on which –
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(i) |
goods, in respect of which credit of full amount of input tax was claimed; or |
| (ii) |
goods, manufactured by using goods in respect of which credit of full amount of input tax was claimed; or
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| (iii) |
where goods, in respect of which credit of full amount of input tax was claimed, are used or consumed in packing of any goods, such packed goods, are consigned outside the State; or disposed of or dispossessed by the dealer in a manner for which facility of input tax credit is not admissible or such facility is admissible for partial amount of input tax:
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Provided that where the dealer discontinues his business, full amount of input tax, which was claimed under sub-section (4), in respect of-
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(i) |
goods held by the dealer in the same form and condition in which those were purchased; or
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| (ii) |
goods which have been used in manufacture of any goods held by the dealer, (whether in semi-manufactured or manufactured state);
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| (iii) |
goods which have been used or consumed in packing of any goods held by the dealer, in closing stock on the day on which he has discontinued business, shall, before end of the tax period prescribed for submission of the tax return for the tax period in which business is discontinued, shall be debited by the dealer into the account of input tax credit maintained by him.
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| (7) |
Except where- |
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(i) |
purchased goods; or |
| (ii) |
manufactured goods which are manufactured by using purchased goods; or |
| (iii) |
packed goods which are packed by using or consuming purchased goods, |
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are to be sold in the course of the export of the goods out of the territory of India, no credit of any amount of input tax shall be claimed by a dealer under sub section (4) and no facility of input tax credit shall be allowed to a dealer in respect of purchase of any goods where -
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(i)
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sale of such goods by the dealer is exempt from payment of tax under clause (c) of section 7; or
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(ii)
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such goods are to be used or consumed in manufacture or packing of any goods and sale of such manufactured or packed goods by the dealer is exempt from payment of tax either under clause (b) or clause (c) of section 7;
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(iii)
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such goods are for transfer of right to use such goods.
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| (8) |
Amount of admissible input tax credit for a tax period and for an assessment year shall be computed in the prescribed manner and shall be claimed and allowed within such time and in such manner as may be prescribed.
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| (9) |
(a) |
Where any goods, purchased from within the State, are sold by a principal through a selling agent or where any goods are purchased by a purchasing agent on behalf of a principal, input tax credit, in respect of purchase of such goods, shall be claimed by and be allowed to the principal in such manner as may be prescribed.
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| (b) |
Where works contract is partially executed by a sub contractor, the amount of input tax credit, in respect of purchase of goods involved in the execution of works contract shall be claimed by and be allowed to the contractor or such sub contractor to the extent of purchase of goods by them.
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| (10) |
Every dealer, who claims input tax credit under this section, shall, in respect of input tax, input tax credit and inventory of goods, maintain such records and furnish such statements as may be prescribed.
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| (11) |
Where it appears to the assessing authority that amount of input tax or amount of input tax credit shown in any statement furnished by any dealer is incorrect or is not worthy of credence, it may, after giving reasonable opportunity of being heard to such dealer and after making such inquiry as it may deem fit, determine the amount of input tax or amount of input tax credit, as the case may be, by making an order in writing:
Provided that where matter relates to any tax return submitted under section 24 or in any assessment proceedings under any section of this Act, proceedings shall be completed in accordance with provisions of relevant sections.
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Explanation: For the purposes of this section, –
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(i) |
goods for use in manufacture of any goods includes goods required for use, consumption or utilization in manufacture or processing of such goods or goods required for use in packing of such manufactured or processed goods;
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| (ii) |
manufacture of any goods includes processing of such goods and packing of such manufactured or processed goods; and
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| (iii) |
where during the process of manufacture of any taxable goods any exempt goods are produced as by-product or waste-product, it shall be deemed that purchased goods have been used in the manufacture of taxable goods. Conversely, where during the process of manufacture of any exempt goods any taxable goods are produced as by-product or waste-product; it shall be deemed that purchased goods have been used in the manufacture of exempt goods.
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| (iv) |
Where during the process of manufacture of any vat goods any non-vat goods are produced as by-product or waste-product, it shall be deemed that purchased goods have been used in the manufacture of vat goods. Similarly, where during the process of manufacture of any non vat goods any vat goods are produced as by-product or waste-product, it shall be deemed that purchased goods have been used in the manufacture of non vat goods.
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