Act so repealed.

Nothing contained in this Regulation or the rules made thereunder shall be deemed ccrtaia sales to impow or'authorise the impo$itior, of tax on any sale o when such sale takes . not liabk to place- (ax.

1. (a) in the course.of iatei-state trade or commerca;
2. (b) outside ~k'and Diu; or
3. (c) in the course of @port of the goods hito, or,' the goods out of, the . . territory of India.' . .. ' 74 of 1956. ~rplmlfon.-Sectio~3,4 and 5 of the Central ~ales~g~ct, .. . 1956 shall apply for determining whether or bt aparticular sale takesplace in the pecified in clause (a) or clause (6) or cla* (c) of this~ion. 8. (1) The provisions ofthis section shall apply- ~djushmotr fohn (0 6, in &latiin@ the sale ofgoods by any dea ' i..
4. (A) such sale hai been cancelled; or . ~ . .
5. (B) the *ofsuch sale has been varied 6r &ved;or .. ., .. . . agreed for such sale habk altered by agreement due to the offerof a disco&l or for any other k+mn;
6. (D) the goods or part of the goods sold have been returned to the dealer; or Tax credit.
7. (E) the whole or part of the price payable by the buyer for the purchase of the goods has been written-off by the dealer as a bad debt; and
   • (ii) the dealer has, in relation to the sale of goods,-
8. (A) provided a tax invoice in relation to such sale and the amount shown therein is not the tax properly chargeable on that sale; or
9. (B) firnished a return in relation to such sale and has accounted for an amount of tax on that sale which is not the amount properly chargeable on that sale.

1. (2) Where a dealer has accounted for an amount of tax improperly charged as referred

to in sub-section (I), thedealer shall make an

adjushnent in calculating the tax payable in the return for the

tax period during which it has become apparent that the tax is improperly

charged.

1. (3) If the tax payable in relation to the sale referred to in sub-section(]), exceeds the tax actually accounted for by the dealer, the amount of the excess tax shall be deemed to accrue during the tax period in which the adjustment is made, and such excess tax shall not be athibutable to any earlier tax period.
2. (4) If the tax actually accounted for exceeds the tax payable in relation to the sale referrea to in sub-section (I), the amount of shortfall in tax shall be reduced from the'tax payable by the dealer during the tax period in which the adjustment is made, and such shortfall in tax shall not be alhibutable to any earlier tax period.
3. (5) Where a dealer sells goods which have been use&
   • (a) pattly for making the sales subject to tax under this Regulation or sales not liable to tax under section 7; and
4. (6) partly for other purposes, the amount of tax on the sale of the goods shall be the higher of the following :- (i)A-(AxBIC); or (i0A-B; where

A = the tax for which the dealer shall be liable in respect of the sales other than the

tax liability arising under this section; B = the amount by which the tax credit of the dealer in respect of the goods was reduced under sub-section

1. (4) of section 9; C = the amount of the tax credit before reducing tax credit under sub-section (4) of section 9. 9.
2. (1) Subjkt to the provisionscontained in sub-section (2), adealer, who is registered or is required to he registered under this Regulation, shall be entitled to atax credit in respect ofthe turnover of purchases made during the tax period where the purchase have been made as a dealer and the goods are meant to be used directly or indirectly by him for the purpose of making-
   • (a) the sales which are liable to tax under section 3; or
3. (6) the sales which are not liable to tax under section 7.
4. (2) No tax credit shall he allowed-
   • (a) in the caseofpurchase of goods from a person who is not a registered dealer; SERIES - I No. : 05 DATED laTH AUGUST, 2005.
   • (b) for the purchase of noncreditable goods specified in the Sixth Schedule;
   • (c) for the purchase of goods by a person which are to be used as a part of the structure of a building owned or occupied by stich person. Explanation-For the removal of doubts, it is hereby declared that a tax credit shall be allowed in respect of the goods and building materials which are purchased by a perso11 either for the purposes of re-sale without any alteration, or for the performance of a works contract in respect of a building owned or occupied by another person; and

(4 for the goods purchased from a dealer who has opted to pay tax under

section 16;

1. (3) The amount ofthe tax credit to which adealer isentitled in respect of the purchase of goods shall

be the amount of input tax arising during the tax period as reduced in the

manner specified in sub-sections

1. (4) and (6).
2. (4) Where a dealer has purchased goods and the goods are to he used partly for the

purpose of making the sales referred to in sub-section (I) and partly for other purposes, the

amount of the tax credit shall be reduced proportionately.

1. (5) Every dealer shall determine, in fair and reasonable manner, the extent to which

the goods are used in the manner specified in sub-section

(4): Provided that in case the Commissioner is of the opinion that the manner determined by the dealer is not fair and reasonable, he may-

1. (a) after recording the reasons in writing, reject the method adopted by the dealer and calculate the amount of

tax credit after determining such extent in a fair and

reasonable manner; or (b) in consultation with the Government, specify, by notification, the methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in a case or a class of cases.

1. (a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (I); and
2. (b) the goodi so purchased or goods manufachjh out of such goods so purchased are to be exported From Daman and Diu, by way of winsfer to a- (9 consignment agent who is not residing in Daman and Diu and such transfer is not by way of sale in the Daman and Diu; or
   • (ii) branch of the dealer when such branch is located outside Daman and Diu and such transfer is not by way of sale in Ule Daman an Diu, the amount of the tax creditshall be reduced by such brcentage as may be prescribed.

1. (7) No tax credit shall be allowed under this sectidn fbr-
   • (a) the purchase of goods from an unregisterd dealer;
   • (b) the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the Pirst Schedule.
2. (8) The tax credit shall be claimed by a dealer only if he possesses a tax invoice at the time, prescribed under section 26 or section 27, for filing the return for the tax perfod. .. . Explanation .-Pokthe removal of doubts, it is heeby declared that- , . (0 tax credits arising under this section shall b&allowed only for- . . . .. . ~ . .
   • (a) .a purchase, including a purch an instalment sale and hire- purchase of goods, made on and afte of commencement of this Regulation; or SERIES - I No. : 05 DATED lgn' AUGUST, 2005.
   • (b) a purchase by way of the acquisition of a right to use goods, to the extent that the right to use goods is exercised after the date ofcommencement of this Regulation; (10 Nothing contained in this section shall prevent any person from claiming tax credit allowed under section 14.