Section 11(4) in The Kerala Value Added Tax Act, 2003
(4)Unregistered dealers or dealers paying presumptive tax under subsection (5) of section 6 or dealers paying compounded tax under section 8 or dealers who transfer the right to use goods under clause (c) of subsection (1) of section 6 shall not be eligible for input tax credit.Provided that where a dealer has opted to pay tax under section 8 in respect of certain transactions and is liable to pay tax under sub- section (1) of section 6 in respect of others, he shall be eligible for input tax credit only on the purchases of taxable goods made in relation to the sales in respect of which he pays tax under sub-section (1) of section 6:Provided further that notwithstanding anything contained elsewhere in the Act, manufacturers of medicine who have opted for payment of compounded tax under clause (e) of section 8 shall be eligible with effect from 1st April, 2005 for input tax credit, for the tax paid under this Act, under the Kerala Tax on Entry of Goods into Local Areas Act, 1994, on purchase of raw materials, packing materials and capital goods used exclusively for the manufacture of own taxable goods.
