(1) A registered dealer shall be entitled to input tax credit or input tax rebate subject to the provisions of section 22 and subject to the restrictions and conditions as mentioned in this Chapter.

(2) where capital goods, as referred to in clause (6) of section 2, have been purchased by a registered dealer for the purpose for which input tax credit or input tax rebate under sub-section (4) of section 22 is allowed on such capital goods, the input tax credit or input tax rebate on such capital goods shall be available in one instalment only in the month in which such goods have been capitalised in the books of accounts of such dealer:

Provided that where the total amount of input tax credit or the input tax rebate in respect of capital goods value of which is above rupees one crore, has not been claimed by a registered dealer till coming into force of this provision, the remaining amount of input tax credit or input tax rebate in respect of such capital goods may be available in one instalment within three months from the date of coming into force of this provision:

Provided further that input tax credit or input tax rebate in respect of capital goods acquired by a registered dealer on hire purchase or on instalment or on transfer of right to use, shall be available only on the amount of tax charged by the selling dealer during a tax period.

(2A) Where the capital goods purchased and capitalised by a registered dealer are used for the purpose of manufacturing both taxable and non-taxable goods, input tax credit or input tax rebate on such goods, depending on the expected sale of taxable goods as a percentage to total sales during a period as given in column (2), shall be available to such dealer to the extent as stated in column (3) on the Table below:-

Table

Provided that where a registered dealer has enjoyed input tax credit or input tax rebate on capital goods in accordance with the provision of this sub-rule and at the end of the period, it is found that the registered dealer has enjoyed input tax credit or input tax rebate more than the amount he is eligible for, the input tax credit or input tax rebate of such registered dealer shall be reversed to the extent to which he is ineligible in the first month following such period.

Explanation.-For the purpose of this sub-rule, the word "period" means twelve consecutive months following the month of capitalisation of the capital goods in the books of accounts of the dealer.

(3) Where a non-taxable goods becomes taxable from a particular date after the appointed day and input tax credit or input tax rebate has not been availed on capital goods used in manufacturing such goods, then the amount of input tax credit or input tax rebate that will be available on such capital goods shall be calculated on the basis of the following formula.-

Where

'Y' = Input tax credit or input tax rebate available;

'A' = Input tax paid at the time of purchase of the capital goods;

'B' = Written down value of the capital goods on the date from which the manufactured goods become taxable; and

'C' = Actual cost, as capitalised, of the capital goods.

Explanation.- The expression "Written down value" used in the form no.ula means the actual cost less the depreciation till the date prior to the date from which the goods became taxable.

Provided that the input tax credit or the input tax rebate shall be available on such capital goods which have been purchased within a period of three years preceding the date on which such non-taxable goods became taxable.

(4) Where a manufacturer of taxable goods manufactures the capital goods required by him for the purpose of such manufacture, he shall be entitled to avail of the input tax credit or input tax rebate in respect of purchase of such goods, required directly for the purpose of manufacture of such capital goods.

(5) Input tax credit or input tax rebate shall be allowed if any taxable goods, as such or after being partially processed are sent by a manufacturer registered under the Act to a job worker for further processing, testing, repair, reconditioning or any other purpose, and it is established from the challans, documents or records produced by the registered dealer concerned that the goods in question have eventually been received by him within ninety days from the date of despatch to the job worker and eventually sold :

Provided that the input tax credit or input tax rebate, if already enjoyed, will be reversed in the manner specified in the rule when the goods are not received back within ninety days.

(5A.) Where a registered dealer purchases any taxable goods from another registered dealer in West Bengal for transfer of such goods in accordance with the provisions of sub-clause (c) of clause (39) of section 2, the input tax credit or input tax rebate available, if any, on such purchase, shall be equally apportioned during the total period of such transfer, subject to such transfer.

(6) Where a registered dealer starts making payment of tax on sales of goods under sub-section (2) of section 16, upon being ineligible to pay tax under the provisions of fourth proviso to sub-section (3) of that section, then notwithstanding anything contained in clause (g) of sub-rule (1) of rule (20), such dealer shall be able to enjoy the input tax credit or input tax rebate, on such goods, other than capital goods, held in stock from the date from which he became so ineligible to pay tax under sub-section (3) of section 16 and when such goods were purchased within the period during which tax was paid under sub-section (3) of section 16:

Provided that such dealer shall, within fifteen days from the date of his becoming ineligible to pay tax under sub-section (3) of section 16, submit to the appropriate assessing authority a statement in the forms as given in sub-rule (4) of rule 22:

Provided further that in respect of such a dealer, the provisions of rule 22 shall apply mutatis mutandis in the matter of his entitlement to input tax credit or input tax rebate on such stock of goods.

(7) Subject to the provisions of clause (a) of section 61, where the input tax credit or input tax rebate of a registered dealer determined for a period exceeds output tax for that period then the excess amount of input tax credit or input tax rebate may be carried forward to the next period.

(8) A registered dealer who claims input tax credit or input tax rebate in respect of any purchase while making payment in respect of such purchase, shall make such payment to the seller by account payee cheque or account payee draft or through electronic banking clearance, where such payment exceeds rupees twenty thousand in a day:

Provided that this provision shall not apply to such purchasing registered dealers who can proves that banking facility is not available at his place:

Provided further that this provision shall not apply to such purchasing registered dealer who purchases tea sold under the auspices of any tea auction centre in West Bengal duly authorised by the Tea Board ofIndia, and where payment in respect of such purchase is made through the Auction Settlement Account maintained by the bank authorised by the said Board:

Provided also that this provision shall not apply to such purchasing registered dealer who makes purchases of goods through a del credere agent, not being a dealer as defined in sub-clause (d) of clause (11) of section 2 duly authorised by the seller to receive such payment through cheque, draft or banking clearance as stated in this sub-rule and where the selling dealer has informed his assessing authority in writing giving details of such agreement within 30 days of making the payment.

(9) A registered dealer who intends to claim input tax credit or input tax rebate shall, for the purpose of determining the input tax credit or input tax rebate, maintain accounts, documents and all other relevant records in respect of purchases and sales made by him in West Bengal and in the course of inter-State trade and commerce and shall also maintain the registers prescribed elsewhere in the rule for such purpose.

(10) A registered dealer shall while determining the net tax payable by him in respect of a tax period, first deduct the net tax credit as referred to in sub-section (17) of section 22 from the output tax for such period under the Act, and if there is still any balance of input tax credit or input tax rebate available thereafter, he shall deduct such input tax credit or input tax rebate from the tax payable under the provisions of the Central Sales Tax Act, 1956 for that tax period.