(1)Subject to the provisions of this Act, 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 sales or any other sales as may be prescribed, or purchases under section 10 during that period.(2)The input tax credit to which the registered dealer is entitled to shall be the amount of tax paid by the registered dealer to the seller, on his turnover of purchases made during the tax period, intended to be used for the purposes and subject to the conditions as specified in sub-section (3), sub-section (4) and sub-section (5) and calculated in such manner as may be prescribed.(3)Subject to such conditions and restrictions as may be prescribed, partial input tax credit may be allowed in such cases as may be notified by the Government.(4)Input tax credit shall be allowed for purchase of goods made within the State of Manipur 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 Manipur; or(b)use as raw material or as capital goods in the manufacturing and processing of goods other than those exempt from tax under this Act intended for sale in the State of Manipur; or(c)inter-States sales effected from the State of Manipur; or(d)manufacture of goods, production, processing, assembling, treating, repairing, reconditioning, re-engineering, packaging in Special Economic Zone (SEZ) and Software Technology Part (STP); or(e)for use as containers for packing of goods other than those exempt from tax under this Act for sale or resale in the State of Manipur:Provided that if purchases are used partially for the purposes specified in this subsection, input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub-section.(5)Exports to be zero-rated. - A sale specified under section 5 of the Central Sales Tax Act 1956 (Act 74 of 1956) by a dealer or an Export Oriented Unit, shall be Zero-rated. In such cases there shall be no tax payable on the turnover of such sale and the person exporting the goods shall be entitled, in the manner prescribed, to a credit of input tax paid :(i)on the purchase of the goods sold in the course of export, or(ii)on the purchase of inputs and capital assets which have been used for the manufacture of goods sold in the course of export.Provided that the input tax credit on account of capital assets shall be allowed to the extent and the manner prescribed.Explanation. - For the purposes of this subsection all sale of inputs made to dealers in a Special Economic Zone outside the Customs Territory of India shall also be Zero-rated.(6)Notwithstanding anything contained in sub-section 17(5), sales of goods made to UNO or foreign diplomatic missions or consulates shall not be exempted:Provided that the tax paid by such organizations/institutions on their purchases will be refunded in full in the manner prescribed.(7)Input tax credit on capital goods shall be limited to plant and machinery directly connected with the manufacturing or processing of the finished products and input tax credit as admissible under this section shall commence from the date of commencement of commercial production and shall be adjusted against tax payable on output over a period of 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.(8)Input tax credit shall not be claimed by the dealer until the tax period in which the dealer receives the tax invoice original containing the prescribed particulars of the sale evidencing the amount of 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 specified.(9)A registered dealer who intends to claim input tax credit under sub-section (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 Manipur.(10)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 to make payment of presumptive tax at a percentage of the turnover of sales in lieu of tax as provided under section 21 ;(iii)in respect of capital goods other than those directly used for manufacturing or processing of goods for sale ;(iv)in respect of goods brought from outside the State against the tax paid in other State;(v)in respect of stock of goods remaining unsold at the time of closure of business ;(vi)in respect goods purchased on payment of tax, if such goods are not sold because of any theft;(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 branch transfer of stock other than by way of sale outside the State of Manipur ;(x)in respect of sales exempt from tax as specified in Schedule-II; and(xi)in respect of raw materials used in manufacture or processing of goods where the finished products are dispatched for branch transfer of stock other than by way of sales :Provided that 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.(11)If the purchase of goods intended for sale or resale or use specified under subsection (4) are not sold or resold or used because of theft, loss or destruction for any reason or if the stock of such goods remains unsold at the time of closure of business but such goods are subsequently used, fully or partly, for purposes other than those specified under the said sub-section, the input tax credit availed at the time of such purchase shall be reduced from the subsequent input tax credit and the amount of reverse tax credit in respect thereof shall be calculated in a manner that is just and reasonable.(12)The methods that are used by a 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, shall be fair and reasonable in the circumstances. The Commissioner may, after giving sufficient reason in writing, reject the method adopted by the registered dealer and calculate the amount of input tax credit after giving the registered dealer concerned an opportunity of being heard.(13)Where a dealer effects any sale of such goods whether within the State or in the course of inter-State trade or commerce, as are held in stock on 01.04.2005 but which had been purchased after 01.04.2004 after paying the tax under the Manipur Sales Tax Act 1990, he shall claim and be allowed input tax credit of such tax in the manner prescribed.
