Section 12(1) in The Kerala Value Added Tax Act, 2003
(1)In calculating the net tax payable by a dealer for a return period there shall be deducted from the tax payable for the return period, a sum equal to -(a)the tax paid under sub-section (2) of section 6; and(b)the tax paid under section 3 of the Tax on Entry of Goods into Local Areas Act, 1994 (15 of 1994) on the import of any goods, other than those included in the fourth schedule; where such goods are intended for resale or for use in the manufacture of taxable goods or for use in the execution of works contract or for use as containers or packing materials for the packing of taxable goods in the state:Provided that where the special rebate is in respect of capital goods, the same shall be allowed over a period of three years and all the conditions and restrictions applicable to input tax credit under subsection(2) of section 11 shall apply to the special rebate under this section also:Provided also that where the goods except plywood, packing cases, splints and veneers in respect of which tax is payable under sub-section (2) of section 6 is sold in the State or in the course of interstate trade or used in the course of manufacture of taxable goods in the month in which it is purchased, the special rebate allowable in respect of such goods resold or sold in the course of interstate trade or used in the manufacture of goods liable to pay tax under this Act or Central Sales Tax Act, 1956 may be availed in the month itself.Provided also that where the goods in respect of which tax under subsection (2) of section 6 or under section 3 of the Kerala Tax on Entry of Goods into Local Areas Act, 1994 has been paid, are sent outside the State or used in the manufacture of goods and the same are sent outside the State, otherwise than by way of sale in the course of inter- state trade or export or where the sale in the course of inter- state trade is exempted from tax, the special rebate under this section shall be limited to the amount of such tax paid in excess of four percent :Provided also that where the goods in respect of which tax under subsection (2) of section 6 or under section 3 of the Kerala Tax on Entry of Goods in to Local Areas Act, 1994 has been paid and where such goods are resold in the State at reduced rate or a part of which has been resold and the balance disposed in the state otherwise than by way of sale or used in the manufacture of taxable goods, then the special rebate under this section shall not exceed the output tax payable in respect of such goods or goods manufactured out of such goods.
