Saturday, July 30, 2011

West Bengal VAT - Input tax credit or input tax rebate by a registered dealer.

 West Bengal VAT - Input tax credit or input tax rebate by a registered dealer.

(1) Every registered dealer other than those specified elsewhere in the Act,
shall be entitled to claim an input tax credit or input tax rebate, as defined in
clause (19) of section 2, and in such manner, and subject to such conditions and
restrictions, as may be prescribed.
(2) The input tax credit or input tax rebate, as referred to in sub-section (1),
shall be allowed to 1[the registered dealer who has purchased taxable goods
(hereinafter referred to as the "purchasing dealer") during a tax period for use
by him in West Bengal] subject to the provisions as laid down in sub-section
(3) to sub-section (20).
(3) Where any registered dealer, or a dealer who has made an application
under sub-section (1) of section 24 within thirty days from the date of incurring
liability to pay tax under this Act, without entering into a transaction of sale,
issues to another dealer tax invoice with the intention to defraud the
Government revenue, the Commissioner may , after making such inquiry as he
thinks fit and after giving the dealers a reasonable opportunity of being heard,
deny the benefit of input tax credit or input tax rebate to such dealers issuing or
accepting such tax invoice, either prospectively or the prospectively, for the full
tax period from such date as he may deem fit and proper.
(4) 2[Subject to the other provisions of this section, the input tax credit or
input tax rebate shall be allowed] to the extent of the amount of tax paid or
payable by the purchasing dealer on his purchase of taxable goods, other than
such taxable goods as specified in the negative list appended to this section,
made in the State from a dealer when such goods are purchased for––
(a) sale or resale by him in West Bengal; or
(b) sale in the course of inter-State trade of commerce within the meaning
of section 3 of the Central Sales Tax Act, 1956; or
(c) use as containers or materials for packing of taxable goods intended for
sale, in the State or in the course of inter-State trade of commerce
within the meaning of section 3 of the Central Sales Tax Act, 1956; or
3[(ca) use as containers or materials for packing of goods intended for sale in
the course of export out of India within the meaning of section 5 of the
Central Sales Tax Act, 1956; or]
(d) use as raw materials and consumable stores required for the purpose of
manufacture of taxable goods intended for sale in the State or in the
course of inter-State trade of commerce within the meaning of section 3
of the Central Sales Tax Act, 1956; or
(e) use as containers or packing materials for use in the packing of goods
so manufactured as referred to in clause (d) above; or
(f) use in the execution of works contract; or
(g) use as capital goods required, for the purpose of manufacture or resale
of taxable goods or for execution of works contract, as the case may be,
and purchases of such goods are capitalised in the books of accounts of
such manufacturer, works contractor or reseller, as the case may be; or
(h) use as raw materials, capital goods and consumable stores required for
the purpose of manufacture of any goods to be sold in the course of
export under section 5 of the Central Sales Tax Act, 1956, and
containers or packing materials for use in the packing of goods so
manufactured; or
(i) making zero-rated sales other than those referred to in clause (h) above:
Provided that if purchases are used partially for the purposes specified in
this sub-section, the input tax credit or input tax rebate shall be allowed to the
extent they are used for the purposes specified in this sub-section.
(5) The input tax credit or input tax rebate shall not be claimed by the
purchasing dealer until he receives––
(a) original tax invoice as referred to in sub-section (1) of section 64
issued in the prescribed manner evidencing the amount of tax, from
the registered dealer, or a dealer who has made an application under
sub-section (1) of section 24 within thirty days from the date of
incurring liability to pay tax under the Act, from whom he has
purchased the goods:
Provided that if the original tax invoice issued to a registered
dealer is lost from his custody, the purchasing dealer shall, on making
an application to the Commissioner in such manner as may be
prescribed, be entitled to claim input tax credit or input tax rebate on
the strength of the order, if any, issued by the Commissioner under
this sub-section; and
(b) original invoice, cash memo, or bill, as referred to in sub-section (2)
or sub-section (3) of section 64, as the case may be, issued in the
prescribed manner, from the unregistered dealer from whom he has
purchased the goods.
(6) If the input tax credit or input tax rebate available to a registered dealer
for a year exceeds the output tax for that year, the excess input tax credit or
input tax rebate shall be carried forward to the next year, in the manner as may
be prescribed.
(7) Where the taxable goods purchased are––
(a) despatched outside the State otherwise than by way of sale; or
(b) used as raw materials, consumable stones in a manufacture of taxable
goods, or in the packing of goods so manufactured, and the goods so
manufactured our despatched outside the State otherwise than by
way of sale,
the registered dealer shall be entitled to input tax credit or input tax rebate of
the amount of input tax paid or payable under clause (18) of section 2
calculated at the applicable rate which exceeds the amount calculated at the rate
of four per centum:
Provided that no input tax credit or input tax rebate shall be allowed to
such dealer unless the amount of input tax calculated at the applicable rate
which is more than the rate he is eligible
under this sub-section, his input tax credit or input tax rebate shall be reversed
to the extent to which he is not eligible.
(8) Notwithstanding anything contained elsewhere in the Act, when a dealer
injuring deferment of payment of tax under clause (8), or tax holiday under
clause (b), or a remission of payment of tax under clause (c), of sub-section (1)
of section 118, as the case may be, purchases within West Bengal, taxable
goods which the use as raw materials and consumable stores in the manufacture
of taxable goods or in the packing of goods so manufactured, or which are used
as capital goods required for the purpose of manufacture of taxable goods, such
dealer shall not be entitled to input tax rebate during the period of such
enjoyment which shall be accumulated and carried forward until the expiry of
such period of deferment, or tax holiday, or remission, as the case may be:
Provided that such dealer shall be entitled to such accumulated input tax
credit or input tax rebate after the expiry of such period of deferment, tax
holiday or remission, as the case may be, in such manner and subject to such
conditions and restrictions, as may be prescribed:
Provided further that where in certain circumstances the output tax on
sale of such goods in West Bengal by such dealer is not deferred, exempted,
remitted, as the case may be, such dealer shall be entitled to input tax credit or
input tax rebate in respect of purchases of such taxable goods within the
Bengal:
Provided also that where the goods manufactured by using such goods
have been exported out of the territory of India, such dealer shall be entitled to
refund of input tax credit or input tax rebate in respect of such purchases of
taxable goods within West Bengal.
4[(8A) Notwithstanding anything contained elsewhere in this Act, a dealer as
referred to in sub-section (8), in lieu of allowing his input tax credit or input tax
rebate to be accumulated and carried forward until the expiry of his period of
deferment, or tax holiday, or remission, as the case may be, may, at his option,
and subject to such conditions and restrictions as may be prescribed, be entitled
to refund of seventy-five per centum of the accumulated input tax credit or
input tax rebate in respect of any quarter of a year in such manner as may be
prescribed.]
(9) Notwithstanding anything contrary contained elsewhere in this Act, a
registered dealer as referred to in sub-section (1), shall be entitled to input tax
credit or input tax rebate on taxable goods, other than capital goods, lying in
stock of such dealer on the date on which he became liable to pay tax under this
Act irrespective of the fact that such dealer has not paid input tax under this
Act, in such manner and subject to such conditions and restrictions, as may
prescribed, when such goods are purchased for––
(a) sale or resale by him in West Bengal; or
(b) sale in the course of inter-State trade of commerce within the meaning of
section 3 of the Central Sales Tax Act, 1956; or
(c) use as containers or materials for packing of taxable goods intended for
sale, in the State or in the course of inter-State trade of commerce within
the meaning of section 3 of the Central Sales Tax Act, 1956; or
(d) use as raw materials and consumable stores required for the purpose of
manufacture of taxable goods intended for sale in West Bengal or in the
course of inter-State trade of commerce within the meaning of section 3
of the Central Sales Tax Act, 1956; or
(e) use as containers or packing materials for use in the packing of goods so
manufactured as referred to in clause (d) above; or
(f) use in the execution of works contract; or
(g) use as raw materials and consumable stores required for the purpose of
manufacture of any goods to be sold in the course of export under section
5 of the Central Sales Tax Act, 1956, and containers or packing materials
for use in the packing of goods so manufactured; or
(h) making zero-rated sales other than those referred to in clause (g) above:
Provided further that the burden of proof that such goods are meant
for the purposes mentioned in clause (a) to clause (h), shall lie on such
dealer.
(10) The methods used by a registered dealer in a year to determine the extent
to which the goods are sold, used, consumed or supplied, or intended to be sold,
used, consumed or supplied, shall be fair, reasonable and uniform throughout
the year:
Provided that the Commissioner may, after giving a registered dealer an
opportunity of being heard and for reasons to be recorded in writing, reject the
method adopted by such dealer and redetermine the amount of input tax credit
or input tax rebate.
(11) Every registered dealer availing of the input tax credit or input tax rebate
shall maintain such registers and books of accounts, and such accounts as
referred to in section 63, in such manner, as may prescribed.
(12) Notwithstanding anything contained elsewhere in the section, no input tax
credit or input tax rebate shall be allowed for purchases––
(a) made from a registered dealer who has been allowed to pay tax at a
compounded rate under sub-section (3) 5[, or sub-section (3A), or
sub-section (3B), of section 16 or sub-section (4) of section 18]; or
(b) made in the course of inter-State trade or commerce within the
meaning of section 3 of the Central Sales Tax Act, 1956; or
(c) made in the course of import from outside the country within the
meaning of sub-section (2) of section 5 of the Central sales tax act
That, 1956; or
(d) made for use in business as defined in sub-clause (a) of clause (5) of
section 2, but are subsequently used for any other purposes; or
(e) of such goods and under such circumstances, as are specified in the
negative list appended to the section.
(13) Where ––
(a) a registered dealer––
(i) purchases goods for the purposes specified in sub-section (4)
and such goods are used fully or partly for purposes other than
those specified in that sub-section; or
(ii) purchases goods and such goods are used fully or partly, for
such purposes for which enjoyment of input tax credit or input
tax rebate is not permissible; or
(iii) purchases goods and avail input tax credit or input tax rebate on
such purchases on which he is not entitled to enjoy input tax
credit or input tax rebate, or
(b) a registered dealer has enjoyed input tax credit or input tax rebate, in
respect of goods other than the capital goods lying in stock on the
appointed day, or under sub-section (9), but such goods, prior to such
enjoyment or after, has been so damaged or destroyed that such
goods are unsaleable,
the input tax credit or input tax rebate, if availed of, for such goods, shall be
reversed to that extent to which he is not eligible in the tax period during which
such use has taken place, in such manner as may be prescribed.
(14) Where a registered dealer has purchased any taxable goods from a dealer
who has made an application under sub-section (1) of section 24 within thirty
days from the date of incurring liability to pay tax under the Act, and if the
application for registration of the selling dealer is rejected subsequently, the
purchasing registered dealer shall be entitled to input tax credit or input tax
rebate against such purchases made till the date of order of rejection of such
application.
(15) Where a transferee, lessee, or licensee is a dealer deemed to be registered
under section 27B or where a transferee, lessee, or licensee is a dealer who has
incurred liability to pay tax under section 27C and is registered under section
24, as the case may be, such transferee, lessee, or licensee shall after making
adjustments by way of reverse credit, if any, arising out of such transfers, be
entitled to the input tax credit or input tax rebate, lying unutilised in the account
of transferor, lessor, or licensor, as the case may be, subject to the satisfaction
of the Commissioner that such input tax credit or input tax rebate has not earlier
been availed of by such transferor, lessor, or licensor.
(16) Where any purchaser being a registered dealer to whom a credit note or a
debate note has been issued under section 44, as a consequence of which the
input tax credit or input tax rebate availed of by him in any period in respect of
which the purchase of goods relates, becomes either short or excess, such a
registered dealer shall compensate such short or excess by adjusting the amount
of input tax credit or input tax rebate allowed to him in respect of the tax period
in which the credit note or debate note, as the case may be, has been issued
subject to such conditions as may be prescribed.
(17) The 6[net tax credit for a tax period or a part thereof] shall be determined
in the following manner, namely:–
Net tax credit = A + B – C
Where––
"A" represents the amount of input tax credit or input tax rebate, for
the tax period, which the dealer is entitled to under sub-section (1)
subject to other provisions of this section and including input tax
credit or input tax rebate availed in short of the eligible amount as
referred to in sub-section (16) during the preceding tax periods not
exceeding twelve English calendar months;
"B" represents outstanding input tax credit or input tax rebate brought
forward as determined from the previous tax period;
"C" represents reverse tax credit as determined under the second
proviso to sub-section (7) or sub-section (13) 7[or sub-section (15)]
and includes the amount of input tax credit or input tax rebate availed
in excess of the eligible amount as referred to in sub-section (16).
(18) The State Government may, by notification, specify any class of dealers
that shall not be entitled to input tax credit or input tax rebate weather in full or
in part.
(19) Where a registered dealer transfers any goods to an auctioneer or a broker
or any other agent, such auctioneer or broker or any other agent shall not be
entitled to get input tax credit or input tax rebate.
(20) The burden of proof on the admissibility of the amount of input tax credit
or input tax rebate, shall lie on the 8[registered purchasing dealer].














Regards
G.Srinivas

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