Exclusions for Capital Goods

(7) (a) No input tax credit shall be allowed on purchase of Capital Goods when- (i) goods are not connected with the business of the dealer; or (ii) goods purchased from an un-registered dealer or a dealer whose Certificate of Registration has been cancelled; or (iii) goods purchased from out side the State; or (iv) goods are purchased or paid for prior to the date of commencement of this Act or the date of registration under this Act; or (v) goods are used in manufacturing or processing of goods exempt from tax or Special Category Goods specified in schedule III, or providing services or trading activities which are not liable to tax under this Act; or (vi) goods are used for lease under an agreement of transfer of right to use goods (whether for a specified period or not) for any purpose; or (vii) goods are used in connection with transfer of property in goods involved in the execution of works contract; or (viii) goods on which tax being payable under this Act or under the Uttarakhand (The Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 has not been paid on any earlier sale or purchase of such goods; or (ix) goods are used in generation of energy/power including captive power; or (x) goods have been already used, or acquired for use in any other factory or workshop in India; (xi) goods purchased from a registered dealer who has given an option to pay Presumptive Tax at a percentage of turnover of sales under sub-section (1) of section 7 or a lump sum amount in lieu of tax on sale and/or purchase of such goods by way of composition under sub-section (2) of section 7. Explanation:- The Government may, by notification, declare any Capital Goods which shall not be deemed, for purpose of this Section, to be included in plant, machinery and equipment above.