(1) Adjustment of excess input tax credit -

(i) if the input tax credit of a registered dealer, in a tax period exceeds the tax liability of that period, the excess credit shall be adjusted against any dues including the tax, penalty or interest, if any;

(ii) the balance of excess input tax credit after the adjustment as prescribed in (i) above, may be adjusted against tax payable under the Central Sales Tax Act, 1956 (Central Act 74 of 1956) in that tax period; and

(iii) the excess input tax credit after adjustment under clause (i) and (ii) above shall be carried over to the subsequent period or at his willingness, may be adjusted against any amount due from another dealer.

(2) Where a dealer has availed input tax credit during any tax period, he shall file a statement in Form - YY, within forty-five days from the end of each year.

(3) Notwithstanding anything contained in these rules, the claim for refund shall be preferred in Form -W before the assessing authority having jurisdiction over the assessee and shall be regulated in the following cases as follows:-

(a) subject to the provisions of section 17 of the Act, the claim for refund of tax shall be processed and if such claim is determined to be due, to be refunded, then, such amount claimed shall be refunded within a period of ninety days from the date of receipt of such claim for refund;

(b) the claim for refund made under clause (a) of sub-section (1) of section 80 shall be processed and the excess tax shall be refunded within a period of ninety days from the date of receipt of such claim for refund; (c) in all other cases, falling under clause (b) of sub-section (1) of section 80 of the Act, the dealers can prefer a claim for refund of the excess credit on the return after a lapse of twenty-four months or more or in the event of cancellation of registration and such excess tax shall be refunded, if it becomes due after adjustment, if any, within a period of ninety days from the date of receipt of such claim for refund; and

(d) the claim for refund of tax paid under this Act as per sub-section (5) of section 80 preferred by the specialized agencies shall be processed and such tax shall be refunded within a period of ninety days from the date of receipt of the claim for refund.

(e) the claim petition filed in Form - W shall be scrutinized by the assessing authority and sanction order / pay order shall be issued by the Head of the Division having jurisdiction over the assessee.

(f) Wherever the claim for refund paid is Rs.50,000/- or more, the claim petition shall be subject to post audit by the internal audit wing and the claim will be referred to audit wing within fifteen days for post audit.