6 Apportionment of tax credit
Where a dealer has purchased goods intended to be used for the purposes specified in sub-section (1) of section 9 and the goods are subsequently used fully or partly for other purposes as specified in sub-section (4) of section 9 or the goods or goods manufactured out of such goods are exported from Delhi by way of transfer, the tax credit claimed shall be reduced under section 10, in the following manner:-
(i) in case commodity-wise accounts are maintained by the dealer clearly correlating use of goods for making sales under sub-section (1) of section 9 and for other purposes, the tax credit shall be reduced by the amount of input tax paid on the purchases used for such other purposes.
(ii) in case commodity-wise accounts are maintained by the dealer clearly correlating use of goods for making sales referred in sub-section (1) of section 9 and for transfer of goods or goods manufactured out of such goods, the tax credit shall be reduced in the manner specified in rule 7.
(iii) in case commodity-wise accounts are not maintained by the dealer clearly correlating use of goods for making sales referred to in clause (i) above, the reduction of tax credit shall be calculated on the basis of the purchase price of such goods immediately preceding their use for other purposes or their fair market value, whichever is higher.
(iv) in case commodity-wise accounts are not maintained by the dealer clearly correlating use of goods for making sales referred to in clause (ii) above, the reduction of tax credit shall be calculated on the basis of the purchase price of such goods immediately preceding to their transfer or their fair market value, whichever is higher, and the input tax credit shall be reduced in the manner specified in rule 7.
Rule 6A. (1) Restriction and conditions governing tax credit
(1)Omitted vide notification No.F.3(23)/Fin(Rev-I)/2011-12/DSIII/68, dated 27.01.2012, w.e.f 27.01.2012.Earlier inserted vide notification No.F.3(23)/Fin(T&E)/2009-10/jsfin/287, dated 1.4.2010, w.e.f. 1.4.2010 and read as, For the purpose of working out the entitlement of tax credit under sub-section (1) of section 9 of the Act to the extent of proportion of the goods which have been put to sale during the tax period, the input tax credit on the closing stock available with the dealer at the end of every tax period shall be carried forward to the next tax period or the following tax period or periods, as the case may be, till such stock is sold by the dealer:
Provided that this sub-rule shall not prevent the claim of refund of a dealer for sales already effected during the relevant tax period or to a dealer who makes sales in the course of exports out of India, or in the course of interstate trade and commerce, or, in such cases where the dealer being a manufacturer is required to make purchases of raw materials taxable at a higher rate of tax, while the sales of goods manufactured by him (not being goods exempt under section 6 as specified in the First Schedule to the Act) are taxable at the lower rate under the Act.
(2) Before allowing the claim of input tax credit to a dealer, the assessing authority may satisfy himself that the conditions laid down in clause (g) of sub-section (2) of section 9 of the Act are also satisfied.
(3) The provisions of sub-section '(5) of section 10 of the Act relating to proportionate reduction of tax credit on purchases of goods sold at a price lower than the purchase price shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss or where the dealer receives a 'discount or incentive through a credit note issued by the selling dealer afterissuance of tax invoice.
Explanation- For the removal of doubt, it is hereby clarified that the provisions of sub-section (5) of section 10 of the Act shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss.
(4) In the cases where the sale has been made at price lower than the purchase price in pursuance of the administered prices of the oil companies, that is to say, Indian Oil Corporation, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd. the provisions of section 10(5) shall not apply.”
Rule 6A(2)
“Before allowing the claim of input tax credit to a dealer, the assessing authority may satisfy himself that the conditions laid down in clause (g) of sub-section (2) of section 9 of the Act are also satisfied.”
Rule 6A(3)
The provisions of sub-section (5) of section 10 of the Act relating to proportionate reduction of tax credit on purchases of goods sold at a price lower than the purchase price shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss or where the dealer receives a discount or incentive through a credit note issued by the selling dealer after issuance of tax invoice.
Explanation :- For the removal of doubt, it is hereby clarified that the provisions of sub-section (5) of Section 10 of the Act shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss.
Rule 6A(4)
In the cases where the sale has been made at price lower than the purchase price in pursuance of the administered prices of the oil companies, that is to say, Indian Oil Corporation, Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd., the provisions of section 10(5) shall not apply.”
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