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[Cites 0, Cited by 4] [Entire Act]

State of West Bengal - Section

Section 22 in West Bengal Value Added Tax Act, 2003

22. 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 [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] [Substituted w.e.f. 01.04.2005 by S. 12(9) (a) of WB Act XVIII of 2006 for 'the dealer who has purchased taxable goods (hereinafter referred to as the 'purchasing dealer') during the tax period'.] 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)[Subject to the other provisions of this section, the input tax credit or input tax rebate shall be allowed] [Substituted w.e.f. 01.04.2005 by S. 12(9) (b) (i) of WB Act XVIII of 2006 for '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
(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] [Inserted w.e.f. 01.04.2005 by S. 12(9) (b) (ii) of WB Act XVIII of 2006.]
(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 exceeds the amount calculated at the rate of four per centum:Provided further that where a registered dealer has already enjoyed input tax credit or input tax rebate at a 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.
(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.] [Inserted w.e.f. 01.04.2005 [N. 1594 FT dt. 13.9.06] by S. 12(9) (c) of WB Act XVIII of 2006.]
(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) [, or sub-section (3A) , or sub-section (3B) , of section 16 or sub-section (4) of section 18] [Substituted w.e.f. 01.08.2006 by S. 12(9) (d) of WB Act XVIII of 2006 for '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 [net tax credit for a tax period or a part thereof] [Substituted w.e.f. 01.04.2005 by S. 12(9) (e) (i) of WB Act XVIII of 2006 for 'net tax credit shall be determined'.] shall be determined in the following manner, namely:-Net tax credit = A + B - CWhere -"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) [or sub-section (15) ] [Substituted w.e.f. 01.04.2005 by S. 12(9) (e) (ii) of WB Act XVIII of 2006 for 'or provison to 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 [registered purchasing dealer] [Substituted w.e.f. 01.04.2005 by S. 12(9) (f) of WB Act XVIII of 2006 for 'registered dealer'.].Negative List[See sub-section (4) and sub-section 12 (e) of section 22.]List of goods not eligible for input tax credit or input tax rebate
Serial No.(1) Description of goods(2)   Exceptions(3)
1 Air-conditioning units, air coolers, fans andair circulators.   When the registered dealer is in the business ofdealing in such goods.
2 All automobilesincluding commercial vehicles, and two and three wheelers, andspare parts for repair and maintenancethereof.   When the registered dealer is in the business ofdealing in such automobiles or spare parts.
3 Crude oil.   When the registereddealer is in the business of dealing in crude oil or ofmanufacturing any goods taxable under the Actusing crude oil as a raw material.
4 Food, beverages and tobacco products.   When the registered dealer is in the business ofdealing in such goods.s
5 Building materials,namely,bricks, sand, cement, stonechips,iron and steel asreferredto in section 14 ofthe CentralSales Tax Act, 1956, marble,tiles, doors, windows,sanitaryfittings, bathroomfittings, drainpipes and all other materialsused inconstruction,reconstruction or repair of a civilstructure or parts thereof.   [When the registereddealer is a works contractor and uses such goods in the executionof works contracts, or when the registered dealer is in thebusiness of dealing in [Substituted w.e.f. 01.08.2006 by S. 12(9) (g) (i) of WB Act XVIII of 2006 for 'When the registered dealer is a works contractor, or when the registered dealer is in the business of dealing in such goods.]such goods.]
6 Office equipments.   When the registered dealer is in thebusiness ofdealing in such goods.
7 Furniture, fixture including electrical fixturesand fittings.   When the registered dealer is in thebusiness ofdealing in such goods.
8 Taxable goods whichare used ascapital goods, raw materials,considerable storesrequired inthe manufacture of goods specified in Schedule A orused in the packing of goods so manufactured and not sold in thecourse of export.    
9 Goods purchased and accounted for in businessbut utilised for the purpose of providing facility to theemployees including any residential accommodation.    
10 Goods used for personal consumption or receivedas gifts.    
11 Taxable goodspurchased for use in business other than that as defined insub-clause (a) ofclause (5) of section 2.    
[12 [Inserted w.e.f. 01.08.2006 by S. 12(9) (g) (ii) of WB Act XVIII of 2006.] Coal, furnace oil, or any other fuel used forany purpose.   When the registered dealer is in the business ofdealing in such goods
13 Generators and parts and accessories thereofused for captive generation   When the registereddealer is in the business of dealing in such goods]