(2)The input tax credit shall not be allowed,-(i)when the input is used for manufacture of exempted goods;(ii)when the goods purchased are consumed for own use (i.e) not connected with the business of the dealer;(iii)in respect of following goods:-(a)Indian Made Foreign Liquor;(b)sugarcane (sugarcane is taxable at the point of purchase and such purchase tax is not eligible for input tax credit);(c)all kinds of pan masala with or without tobacco;(d)narcotics;(e)civil structure and immovable goods or properties;(f)building material used in construction activity, except when used by a works contractor;(g)office equipment;(h)capital goods purchased prior to the date of commencement of this Act or capital goods purchased by dealers in IMFL, rectified spirit, narcotics, pan masala with or without tobacco after the commencement of this Act;(i)petrol, diesel, aviation turbine fuel and other motor spirit;(j)Molasses; and(k)Rectified spirit;(iv)for goods purchased prior to twelve months from the date of commencement of this Act:Provided that input tax credit will be allowed for the stock held on the date of commencement of this Act subject to such terms and conditions as may be prescribed:Provided further that such goods are falling within the list of goods specified in Part-A of the Second Schedule, Part-A of the Third Schedule or Part-A of the Fourth Schedule to this Act ;(v)for goods purchased from non-taxable dealers;(vi)for goods purchased from a dealer paying tax on compounded rate, as provided under sub-section (2) of section 15 and under section 19 of this Act; and(vii)for a casual trader.
