(1) The extent of input tax credit available to a registered dealer, for a tax period, shall be equal to the amount of tax paid on purchases as evident from the original tax invoice, and where such invoice has been lost, on the basis of duplicate copy thereof issued to him in accordance with these rules, subject to the other provisions of the Act, and the following conditions.-

(a) that such dealer has maintained a true and correct separate account of input tax relating to his purchases against tax invoice.

(b) that such dealer has maintained a true and correct separate account of output tax relating to his sales against tax invoice.

(2) Where a dealer effects sales of goods both, taxable and exempt goods, under the Act, the following calculation for claiming input tax credit shall apply:

(a) Where all the sales of a dealer in a tax period are taxable under the Act, the whole of the input tax may be claimed as credit;

(b) Where all the sales of the dealer for a tax period are exempt from tax under the Act, no input tax may be claimed as credit;

(c) Where a part of the sales of a dealer in a tax period are taxable and the remaining part of the sales are of exempted goods under the Act and the input tax relating to the inputs of taxable goods and exempted goods are not identifiable, the amount that can be claimed as input tax credit for the purchase of goods at each rate of tax shall be calculated by applying the following formula;

Where,-

I is the total amount of input tax for each tax rate;

T is the "taxable turnover" of sales which shall include inter state sales of taxable goods and zero rated sales i.e. sales in course of export but shall not include sales relatable to goods imported from outside Assam; and

G is the "Gross turnover" of all sales during that tax period which shall include the sales of exempted goods and the exempt transactions But shall include sales relatable to goods imported from outside Assam.

Explanation.- Transactions falling under section 5(2), 6(2) of the Central Sales Tax Act, 1956 (Central Act 74 of 1956) and turnover of purchases under section 12 shall not be included in the taxable turnover and gross turnover for this purpose.

(3)(a) Where a dealer makes sales of taxable goods and exempt transactions, and the inputs used in such goods are taxable at the rate of 4%, the input tax credit can be calculated by applying the formula, given in sub-rule (2).

Illustration : A dealer engaged in the manufacture of a taxable goods, during a particular tax period, used inputs of Rs. 3 lakhs taxable at 4%. The dealer made sales of Rs. 5 lakhs taxable at 4% and also made stock transfer to other state amounting to Rs. 2.5 lakhs.

Input Tax calculation :

I = Input tax = Rs. 12,000/- ( 4% of Rs. 3 lakhs)

T = Taxable turnover = Rs. 5 lakhs

G = Gross turnover (including stock transfer) = 7.5 lakhs

Input Tax calculation :

The out put tax payable = Rs. 20,000/- (4% of Rs. 5 lakhs)

(b) Where a dealer makes sales of taxable goods and exempt transactions and the inputs used in such a case are taxable at a rate higher than 4%, the tax amounting to in excess of 4% is given as input tax credit in total and for the remaining 4% portion, the formula as mentioned in sub-rule (2) shall be applied.

Illustration : A dealer engaged in the manufacture of cement, during a particular tax period, used inputs of Rs.10 lakhs taxable at 12.5%. The dealer made sales of Rs. 7 lakhs taxable at 12.5% and also made stock transfer to other state (exempt transaction) amounting to Rs. 3 lakhs.

Input tax = Rs. 125,000/- (12.5% of Rs. 10 lakhs)

(c ) Where a dealer makes sales of taxable goods, exempt goods and exempt transactions and the inputs used in such a case are taxable at a rate higher than 4%, the tax amount in excess of 4% and the tax amount for the 4% portion shall be calculated first and then the formula as mentioned in sub-rule (2) shall be applied to both the resultant amount to get the eligible amount of input tax credit.

Explanation.- For calculation of input tax credit, in excess of input tax of 4%, the 'taxable turnover' shall include goods transferred outside the State otherwise than by way of sale.

Illustration : A dealer engaged in the manufacture of taxable and exempted goods, during a particular tax period, used inputs of Rs. 12 lakhs taxable at 12.5%. The dealer made sales of taxable goods of Rs. 1.50 crores and also made stock transfer to other state (exempt transaction) amounting to Rs. 75 lakhs. The dealer further made sales of exempted goods of Rs. 75 lakhs.

Input tax = Rs. 150,000/- ( 12.5% of Rs. 12 lakhs)

Note : While calculating tax credit eligible over 4%, the taxable turnover includes exempt transactions (stock transfer). But while calculating eligible tax credit of 4% portion, the taxable turnover does not include exempt transactions.

(4) Where in the case of any dealer, the Commissioner is of the opinion that the application of the formula prescribed under this rule does not give the correct amount of deductible input tax, he may approve an alternative formula for apportionment of input tax credit where the dealer makes taxable and exempt sales or exempt transactions.