18. Input tax credit exceeding tax liability.-

(1) If the input tax credit of a registered dealer other than an exporter selling goods outside the territory of India determined under Section 17 of this Act for a period exceeds the tax liability for that period, the excess credit shall be set off against any outstanding tax, penalty or interest under this Act.

(2) The excess input tax credit after adjustment under sub-section (1) may be carried over as an input tax credit to the subsequent period or periods.

Provided that the input tax credit shall not be carried forward for a period of more than two years after close of the concerned financial year. Unadjusted input tax credit beyond two years shall have to be refunded.

(3) In case where input tax credit is carried forward, a quarterly credit statement may be forwarded to the dealer concerned and the claims reconciled accordingly.

(4) Declaration of stock of goods held on the appointed day- In case of dealers registered under this Act with effect from the appointed day all tax paid goods purchased on or after April 1^St 2004 and remaining still in the stock as on April 1^st, 2005 will be eligible to receive input tax credit, subject to submission of required particulars and documents on inventory. VAT will be levied on the goods when sold on or after April 1^st, 2005 and input tax credit will be given for the sales tax already paid under the earlier laws in the previous years. Such tax credit will be available over a period of six months after an interval of three months needed for verification as may be prescribed.