Section 11(3) in The Gujarat Value Added Tax Act, 2003
(3)(a)Subject to the provisions of this section, tax credit to be claimed under subsection (1) shall be allowed to a purchasing dealer on his purchase of taxable goods which are intended for the purpose of-(i)sale or re-sale by him in the State;(ii)sale in the course of inter-State trade and commerce;(iii)branch transfer or consignment of taxable goods to other states (subject to the provision of sub-clause(b) below);(iv)sales in the course of export out of the territory of India;(v)sales to export oriented units or the units in Special Economic Zones for sale in the course of export out of the territory of India;(vi)use as raw material in the manufacture of taxable goods intended for (i) to (v) above or in the packing of the goods so manufactured:(vii)[ use as capital goods meant for use in manufacture of taxable goods intended for (i) to (vi) above subject to the condition that such capital goods are purchased after the appointed day] [Sub-clause (vii) was inserted by Gujarat Act No.6 of 2006 Section 10(2) (a).];Provided that if purchases are used partially for the purposes specified in this subsection, the tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section.(b)Notwithstanding anything contained in this section, the amount of tax credit in respect of a dealer shall be reduced by the amount of tax calculated at the rate of four per cent [taxable on the turnover of purchases within the State] [Substituted for the 'Turnover over of purchases' by Gujarat Act No.9 of Section 6(2) w.e.f 1-4-08](i)of taxable goods consigned or dispatched for branch transfer or to his agent outside the State, or(ii)of taxable goods which are used as raw materials in the manufacture, or in the packing of goods which are dispatched outside the State in the course of branch transfer or consignment or to his agent outside the State.(iii)[ of fuels used for the manufacture of goods] [Sub-clause (iii) was inserted by Gujarat Act No.6 of 2006 Section 10(2) (b).][Provided that where the rate of tax of the taxable goods consigned or dispatched by dealer for branch transfer or to his agent outside the State is less than four per cent, then the amount of tax credit in respect of such dealer shall be reduced by the amount of tax calculated at the rate of tax set out in the Schedule on such goods on the [taxable on the turnover of purchases within the State] [These words figures and letter substituted for 'Section 14' by Gujarat Act No.25 of 2006 Section 4.; w.e.f 10-5-06]] [These sub-section was added by Gujarat Act No. 9 of 2008 section 9 w.e.f. 1-4-2008]
