Input tax credit

(1) Subject to the provisions of this Act, an input tax credit as provided in this section shall be claimed by a registered dealer, subject to such conditions and restrictions as may be prescribed on sale of goods in the circumstances specified below: (a) when a registered dealer purchases any input within the State from another such dealer after paying him the tax as specified under section 12, he shall claim credit of the said input tax in the manner prescribed if the goods are sold within the State or in the course of Inter-State trade and commerce; (b) when a registered dealer- (i) purchases any input within the State from another such dealer after paying him the tax under section 12, or (ii) purchases any input and pays tax on such purchase under section 10 of the Act and consumes such goods in the manufacture of any goods mentioned in Schedules II to V under section 12, he shall claim credit of the said input tax in the manner prescribed if the goods so manufactured are sold within the State or in the course of Inter-State trade and commerce; (c) when a registered dealer purchases any capital goods within the State from another such dealer after paying him the tax as specified under section 12, or uses such goods in the manufacture of any goods mentioned in Schedules II to V under section 12 and sells the manufactured goods within the State or in the course of Inter-State trade or commerce or otherwise, he shall claim and be allowed, in such manner as may be prescribed, credit of the amount of such tax; (d) when a registered dealer holds any stock on the appointed day, such goods as have been purchased by him on or after 1st April, 2004 and which have suffered the incidence of tax under the Sikkim Sales Tax Act, 1983, and (i) sells such goods within the State or in the course of Inter-State trade and commerce, or (ii) consumes such goods in the manufacture of any goods mentioned in Schedules II to V of section 12 and the goods so manufactured are sold within the State or in the course of Inter-State trade and commerce, he shall claim credit of the said tax in the manner prescribed; (e) when a registered dealer purchases any input within the State from another such dealer after paying him the tax as specified under section 12 at a rate higher than 4 per centum and transfers such goods or goods manufactured from such goods to another dealer outside the State, he shall be allowed credit of such tax in excess of 4 per centum, in the manner prescribed; Provided that if the claim for input tax credit under clauses (a), (b), (c), (d) or (e), any month exceeds the output tax for the same month, such excess shall be carried forward for adjustment against the output tax of subsequent months not being a month later than two years after the close of the year during which such excess had arisen (2) Any amount of input tax remaining unadjusted after two years after the close of the year during which such excess had arisen shall be refunded to the dealer subject to the provisions of this Act: Provided also that input tax credit in respect of capital goods shall be allowed in the manner and over such period, not exceeding 36 (thirty six) months from the date of their acquisition. Provided further that no credit of input tax shall be allowed in respect of capital assets purchased or acquired before the commencement of this Act (3) Notwithstanding anything contained in sub-section (1), where a registered dealer purchases any input in the circumstances stated in clauses (a) or (b) of sub-section (1) and (i) dispatches such goods or the goods manufactured by consuming such goods to a commission agent registered under the Act or transfers such goods to its branch or head office inside the State of Sikkim for sale as the case may be; or (ii) supplies such goods in the course of execution of a works contract to another such dealer to whom he has let out a sub-contract for use in the execution thereof, the input tax credit on the sale or supply, as the case may be, of such goods shall be claimed by the registered dealer selling the goods on commission or using the goods supplied in the execution of sub-contract, as the case may be, in accordance with the provisions of sub-section (1), in such manner as may be prescribed (4) No input tax credit under sub-section (1) shall be claimed or be allowed to a registered dealer (a) in respect of goods specified under schedule I or such goods as may be notified; or (b) in respect of inputs purchased by him from another such dealer, or manufactured by him and the right wherein to use is transferred to another dealer; or (c) in respect of inputs purchased from a registered dealer permitted to pay tax under provisions of section 16 and section 17; or (d) in respect of inputs consumed either for the manufacture of goods specified in Schedule I of section 12; or (e) in respect of goods used for self consumption or as gift (5) In case the inputs or goods are used partially for the purpose specified in clause (d) or (e) of sub-section (4), the claim for the input tax credit shall stand reduced to the extent they are so used (6) No dealer shall claim input tax credit in respect of inputs purchased, unless he is in possession of an original copy of the tax invoice, signed and issued by the selling registered dealer containing the prescribed particulars of sale (7) If the original tax invoice is lost, input tax credit shall be allowed only on the basis of a duplicate copy of the original tax invoice in the form and manner prescribed.