07-09-2010, 02:10 AM
SRO. 698(I)/96.- In exercise of the powers conferred by section 50 of the Sales Tax Act, 1990, read with sub-section(2) of section 8 thereof, the Central Board of Revenue is pleased to make the following rules, namely.-
1. Short title, application and commencement.-
(1)These rules may be called Apportionment of Input Tax Rules, 1996.
(2)These shall apply to the registered persons who make taxable and exempt supplies simultaneously.
2. Definition.- For the purpose of these Rules,-
(a) "Act" means the Sales Tax Act, 1990; and
(b) "residual input tax" means the amount of tax paid on raw materials, components and capital goods being used for taxable as well as exempt supplies but does not include the input tax paid on raw materials used wholly for making taxable or exempt supplies.
3. Determination of input tax.-
(1)Input tax paid on raw materials relating wholly to the taxable supplies shall be admissible under the law.
(2)Input tax paid on raw materials relating wholly to exempt supplies shall not be admissible.
(3)The amount of input tax incurred for making both exempt and taxable supplies shall be apportioned according to the following formula-
Residual input tax credit on taxable supplies = Value of taxable supplies / Value of taxable + exempt supplies * input tax
(4)Monthly adjustment of input tax claimed by a registered person under these rules shall be treated as provisional adjustment and at the end of each financial year, the registered person shall make final adjustment on the basis of taxable and exempt supplies made during the course of that year.
(5)Any input tax adjustment claimed wrongfully on account of incorrect application of formula spelled out in sub-rule (3) shall be punishable under the respective provisions of law irrespective of the fact that the claim was provisional
1. Short title, application and commencement.-
(1)These rules may be called Apportionment of Input Tax Rules, 1996.
(2)These shall apply to the registered persons who make taxable and exempt supplies simultaneously.
2. Definition.- For the purpose of these Rules,-
(a) "Act" means the Sales Tax Act, 1990; and
(b) "residual input tax" means the amount of tax paid on raw materials, components and capital goods being used for taxable as well as exempt supplies but does not include the input tax paid on raw materials used wholly for making taxable or exempt supplies.
3. Determination of input tax.-
(1)Input tax paid on raw materials relating wholly to the taxable supplies shall be admissible under the law.
(2)Input tax paid on raw materials relating wholly to exempt supplies shall not be admissible.
(3)The amount of input tax incurred for making both exempt and taxable supplies shall be apportioned according to the following formula-
Residual input tax credit on taxable supplies = Value of taxable supplies / Value of taxable + exempt supplies * input tax
(4)Monthly adjustment of input tax claimed by a registered person under these rules shall be treated as provisional adjustment and at the end of each financial year, the registered person shall make final adjustment on the basis of taxable and exempt supplies made during the course of that year.
(5)Any input tax adjustment claimed wrongfully on account of incorrect application of formula spelled out in sub-rule (3) shall be punishable under the respective provisions of law irrespective of the fact that the claim was provisional
