(1)For the purpose of calculating the net tax payable by a registered dealer for any tax period after being registered, an input tax credit as determined under this section shall be allowed to such registered dealer for the tax paid or payable in respect of [all taxable purchase of goods as mentioned in schedule VIII and] [Inserted vide the TVAT (Amendment) Ordinance, 2007 (w.e.f 17-7- 2007) and subsequent legislation vide the TVAT (Amendment) Act, 2007(dt. 9-10-2007)] all taxable sales other than such sales as may be prescribed subject to the following conditions:(a)Input tax credit on capital gods except those mentioned in negative list in Schedule IV shall be adjusted against tax payable by a dealer over a period not exceeding three years.Provided that in case of closure of business before the period specified above, no further input tax credit shall be allowed and input tax credit carried forward, if any, shall be forfeited.(b)In respect of exporting dealers, input tax credit may be spread over a period less than 3 years as may be prescribed.(c)Input tax credit is to be given only after commencement of sale of taxable goods ['and purchase of taxable goods as mentioned in schedule VIII.'] [Inserted vide the TVAT (Amendment) Ordinance, 2007 (w.e.f 17-7- 2007) and subsequent legislation vide the TVAT (Amendment) Act, 2007(dt. 9-10-2007)](d)In respect of inputs used in taxable goods sent on stock / consignment transfer, tax paid in excess of 4% or the prevailing rate of C. S. T. on such inputs is to be credited.(e)Tax paid in excess of 4% on petroleum products used as fuel (other than petrol, Aviation Turbine Fuel and diesel and other fuels when used as fuel in production of taxable goods or captive power is to be entitled for input credit. However, no input tax credit will be given if petroleum product is used as fuel in motor vehicle.(f)Input tax credit shall be allowed during the return period. Refund of excess tax credit shall be allowed only after the end of the financial year.(2)Partial input tax credit is to be made where inputs are used in the following circumstances :-(a)Where sale consists of both taxable and exempted goods.(b)Where sale consists of sale and dispatch in the form of consignment and stock transfer to other states.(c)Where inputs are used for any other purposes in addition to use in the course of business.Provided that input tax credit shall be proportionate to taxable sale out of total sales ['and also shall be proportionate to taxable purchase out of total purchase for the goods as mentioned in schedule VIII'] [Inserted vide the TVAT (Amendment) Ordinance, 2007 (w.e.f 17-7- 2007) and subsequent legislation vide the TVAT (Amendment) Act, 2007(dt. 9-10-2007)]Provided further that in case of consignment transfer, so much of input tax credit shall be given as may be prescribed.(3)Input tax credit shall be allowed for purchase of goods made within the State of Tripura from a registered dealer holding a valid certificate of registration and which are intended for the purpose of -(a)sale or resale by him in the State of Tripura; or(b)use as raw material or as capital goods in the manufacturing and processing of goods other than those exempted from tax under this Act intended for sale in the State of Tripura; or(c)sale in the course of export out of the territory of India; or(d)for use as containers for packing of goods other than those exempted from tax under this Act for sale or resale in the State of Tripura;Provided that if purchases are used partially for the purposes specified in this sub-section, input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section.(4)Input tax credit shall not be claimed by the dealer until the tax period in which the dealer receives the tax invoice in original containing the prescribed particulars of the sale evidencing the amount of the input tax:Provided that for good and sufficient reasons to be recorded in writing and in the prescribed manner, the Commissioner may allow such credit subject to such conditions and restrictions as may be prescribed.(5)A registered dealer who intends to claim input tax credit under subsection (1) shall, for the purpose of determining the amount of input tax credit, maintain accounts, and such other records as may be prescribed in respect of the purchases and sales made by him in the State of Tripura.(6)No input tax credit under sub-section (1) shall be claimed or be allowed to a registered dealer -(i)in respect of any taxable goods under this Act purchased by him from another registered dealer for resale but give; away by way of free sample or gift;(ii)who has been permitted by the Commissioner for composition of tax at a percentage of the turnover of sales in lieu of VAT as provided under section 15;(iii)in respect of capital goods of traders in the initial year i. e. the input tax credit on capital goods would be confined to manufacturers;(iv)in respect of goods brought from outside the State against the tax paid in other States;(v)in respect of stock of goods remaining unsold at the time of closure of business;(vi)in respect of goods purchased on payment of tax, if such goods are not sold because of any theft, destruction or damage for any reason;(vii)where the tax invoice is -(a)not available with the dealer, or(b)there is evidence that the same has not been issued by the selling dealer from whom the goods are purported to have been purchased;(viii)in respect of goods purchased from a dealer whose certificate of registration has been suspended;(ix)in respect of goods used for transfer of stock other than by way of sale outside the State of Tripura;(x)in respect of sales exempt from tax as specified in Schedule III.(xi)in respect of raw materials used in manufacture or processing of goods where the finished products are despatched other than by way of sales:Provided that in respect of transactions falling under item (ix), input tax credit may be allowed on the tax paid in excess of 4% on the raw materials used directly in the manufacture of the finished products.(7)The Commissioner may, after giving sufficient reasons in writing, reject the method adopted by the registered dealer in a year to determine the extent to which goods are used, consumed or supplied or intended to be used, consumed or supplied, in the course of making taxable sales and calculate the amount of input tax credit after giving the registered dealer concerned an opportunity of being heard.
