Rule 6A - Restriction and conditions governing tax credit (sections 9(1), 9(2), 10(5)) - Delhi Value Added Tax Rules, 2005

1 [6A. Restriction and conditions governing tax credit: - (1) 2 [ ******* ] (2) Before allowing the claim of input tax credit to a dealer, the assessing authority may satisfy himself that the conditions laid down in clause (g) of sub-section (2) of section 9 of the Act are also satisfied. 3 [(3) The provisions of sub-section (5) of section 10 of the Act relating to proportionate reduction of tax credit on purchases of goods sold at a price lower than the purchase price shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss or where the dealer receives a discount or incentive through a credit note issued by the selling dealer after issuance of tax invoice.] (4) In the cases where the sale has been made at a price lower than the purchase price in pursuance of the administered prices of the oil companies, that is to say, Indian Oil Corporation, Hindustan Petroleum Corporation Limited and Bharat Petroleum Corporation Limited the provisions of section 10(5) shall not apply.] ****************** Notes: 1. Inserted vide Notification NO.F.3(23)/FIN.(T E)/2009-10 dated 1.4.2010 , w.e.f. 01-04-2010. 2. Omitted vide Notification No. F.3(23)/Fin(Rev-I)/2011-12/DSIII/68, dated 27/01/2012, w.e.f. 27.01.2012. before it was read as:- (1) For the purpose of working out the entitlement of tax credit under sub-section (1) of section 9 the Act to the extent of proportion of the goods which have been put to sale during the tax period, the input tax credit on the closing stock available with the dealer of the end of the every tax period shall be carried forward to the next tax period or the following tax period or periods, as the case may be, till such stock is sold by the dealer: Provided that this sub-rule shall not prevent the claim of the refund of a dealer for sales already effected during the relevant tax period or to a dealer who makes sales in the course of exports out of India, or in the course of inter-state trade and commerce, or, in such cases where the dealer being a manufacturer is required to make purchases of raw materials taxable higher rate of tax, while the sales of goods manufactured by him (not being goods exempt under section 6 as specified in the First Schedule to the Act ) are taxable to the lower rate under the Act . 3. Substituted vide F.3(12)/Fin(Rev-I)/2015-2016/dsvi/650 before it was read as, (3) The provisions of sub-section (5) of section 10 of the Act relating to proportionate reduction of tax credit on purchases of goods sold at a price lower than the purchase price shall apply to the cases where, during the tax period, the dealer receives credit note or notes from the selling dealer on account of discount, commission, rebate, remission in piece or incentive, or by whatever name called. Explanation - For removal of doubt , it is hereby clarified that the provisions of sub-section (5) of section 10 of the Act shall not apply to a case where in the ordinary course of business the goods are sold by a dealer at a loss.