If at the time at which the registration of an unregistered dealer takes effect after the commencement of this Act, and the dealer holds trading stock, for the purpose of sale, or for use as raw materials for the production of finished goods, the dealer shall be entitled to a tax credit for the trading stock or raw materials held by him on the date when his registration takes effect:

Provided that the dealer furnishes a statement of his trading stock and raw materials to the Assessing Authority, in the format as may be prescribed by the Commissioner and is able to prove to the satisfaction of the Assessing Authority, through documentary evidence that he has borne input tax on the purchase of the trading stock or raw materials.

Explanation -I :-

The dealer must claim the entire amount of tax credit to which he is entitled, in a single claim, which accompanies the first return to be furnished under the Act.

Explanation -II :-

This Section applies where goods have borne tax after the commencement of the Act.

Explanation -III :-

In cases of manufacturers claiming remission/availing remission, no input tax credit shall be available on the raw material purchased.