(1) The Government may, by notification, specify such goods or such class of dealers, subject to such conditions and restrictions, as may be specified in that notification, to be allowed input tax credit partially.

(2) Partial input tax credit as referred to in sub-rule (1) shall be at the proportion of the value of actual utilization of input to the value of output in a tax period.

(3) Where the processing or manufacturing activity of a dealer results in the production of both taxable goods and goods exempt from tax, input tax credit admissible shall be determined by applying the principles as provided under sub-rule (1) of rule 11 in respect of each tax period.

Explanation. - For the purpose of this sub-rule, the expression "total input tax" referred to in sub-rule (1) of rule 11 shall be the tax on that part of the input, which is actually utilized in processing or manufacturing.

(4) For the purpose of this rule, the expression "out put" shall mean sale of finished products consequent upon processing or manufacturing or sale of goods used in the execution of works contract, as the case may be.