(1)Input Tax Credit (ITC)- For the purpose of calculating the net tax (VAT) payable by a dealer for each tax period, an input tax credit shall be allowed against the output tax subject to such conditions or restrictions or adjustments, if any, as may be prescribed for the purposes of this section :Provided that,-(i)for all capital goods except those provided under sub-section(2), the input tax credit shall be allowed in three years by equal monthly instalments commencing from the month following the commencement of commercial production or sale of taxable goods;(ii)when the input is transferred, either in same form or otherwise, other than by way of sale and if such transfer is outside the Union Territory, the input tax credit shall be allowed for the input tax paid in excess of the rate prescribed under sub-section (1) of section 8 of the Central Sales Tax Act,1956, (Central Act 74 of 1956.).
