Section 9 in Daman and Diu Value Added Tax Regulation, 2005
9. Tax credit.
(1)Subject to the provisions contained in sub-section (2), a dealer, who is registered or is required to be registered under this Regulation, shall be entitled to a tax credit in respect of the turnover of purchases made during the tax period where the purchase have been made as a dealer and the goods are meant to be used directly or indirectly by him for the purpose of making -(a)the sales which are liable to tax under section 3; or(b)the sales which are not liable to tax under section 7.(2)No tax credit shall be allowed -(a)in the case of purchase of goods from a person who is not a registered dealer;(b)for the purchase of non-creditable goods specified in the Sixth Schedule;(c)for the purchase of goods by a person which are to be used as a part of the structure of a building owned or occupied by such person.Explanation. - For the removal of doubts, it is hereby declared that a tax credit shall be allowed in respect of the goods and building materials which are purchased by a person either for the purposes of re-sale without any alteration, or for the performance of a works contract in respect of a building owned or occupied by another person; and(d)for the goods purchased from a dealer who has opted to pay tax under section 16;(3)The amount of the tax credit to which a dealer is entitled in respect of the purchase of goods shall be the amount of input tax arising during the tax period as reduced in the manner specified in sub-sections (4) and (6).(4)Where a dealer has purchased goods and the goods are to be used partly for the purpose of making the sales referred to in sub-section (1) and partly for other purposes, the amount of the tax credit shall be reduced proportionately.(5)Every dealer shall determine, in fair and reasonable manner, the extent to which the goods are used in the manner specified in sub-section (4):Provided that in case the Commissioner is of the opinion that the manner determined by the dealer is not fair and reasonable, he may -(a)after recording the reasons in writing, reject the method adopted by the dealer and calculate the amount of tax credit after determining such extent in a fair and reasonable manner; or(b)in consultation with the Government, specify, by notification, the methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in a case or a class of cases.(6)Where -(a)a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (1); and(b)the goods so purchased or goods manufactured out of such goods so purchased are to be exported from Daman and Diu, by way of transfer to a -(i)consignment agent who is not residing in Daman and Diu and such transfer is not by way of sale in the Daman and Diu; or(ii)branch of the dealer when such branch is located outside Daman and Diu and such transfer is not by way of sale in the Daman an Diu,the amount of the tax credit shall be reduced by such percentage as may be prescribed.(7)No tax credit shall be allowed under this section for -(a)the purchase of goods from an unregistered dealer;(b)the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the First Schedule.(8)The tax credit shall be claimed by a dealer only if he possesses a tax invoice at the time, prescribed under section 26 or section 27, for filing the return for the tax period.Explanation. - For the removal of doubts, it is hereby declared that-(i)tax credits arising under this section shall be allowed only for -(a)a purchase, including a purchase under an installment sale and hire-purchase of goods, made on and after the date of commencement of this Regulation; or(b)a purchase by way of the acquisition of a right to use goods, to the extent that the right to use goods is exercised after the date of commencement of this Regulation;(ii)Nothing contained in this section shall prevent any person from claiming tax credit allowed under section 14.
