(2)[Where a registered dealer manufactures any goods, the sales of which are taxable and exempt] [Substituted vide Amendment Rules 2006 published in the Official Gazette, Series I No. 35 dated 30-11-2006], the following conditions shall apply for arriving at the eligible input tax credit-(i)where all the sales of a registered dealer for that tax period are taxable, the whole of the input tax may be claimed as a credit.(ii)where only a part of the sales of a registered dealer for any tax period is taxable, the amount of input tax credit shall be worked out in proportion of taxable turnover to the turnover of sales of goods on the purchases of which input tax credit is claimed.(iii)Where a registered dealer makes sale of taxable goods, exempt goods and exempt transaction in a tax period, he shall make the calculation of input tax credit in proportion to such sales. Input tax credit in respect of stock transfers will be subject to the provisions of sub-section (3) of section 6 of the Act.Explanation. - "exempt transactions" means stock transfers and consignment sales.
