34.

Input tax credit in respect of capital goods received in a factory at any point of time in a financial year shall be taken only for an amount not exceeding fifty percent of the tax paid on such capital goods in the same financial year:

Provided that the balance of input tax credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the factory of the manufacturer.

Provided further that input tax credit in respect of inputs or capital goods purchased from a registered dealer holding a valid certificate of registration which are intended for the purposes mentioned in sub-section (4) of section 17 of the Act shall be allowed only if such dealer has maintained records indicating the fact that the inputs or capital goods were supplied from stock on which tax was paid by the producer of such inputs or capital goods, and only an amount of such tax on pro-rata basis has been indicated in the records maintained by him.

Explanation- "input" means all goods except light diesel oil, high speed diesel oil and motor spirit commonly known as petrol used in relation to any manufacture of final products or execution of works contract whether directly or indirectly and whether contained in the final product or transfer of the goods as goods or in any other form or not, and includes lubricating oils, greases, cutting oils, coolants, goods used as paint, or as packing materials, or as fuel, or for generation of electricity or steam used for manufacture of final products or for any other purpose, within the factory of production.