15. Reverse Credit in case of a Manufacturing Dealer

(1) A manufacturing dealer shall incur a reverse credit in the following circumstances:

(a) Sales by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

(b) Stock transfers effected within the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

(c) Stock transfers effected outside the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

(d) Inputs purchased by the dealer from another registered dealer and used in the manufacture of goods the right wherein to use is transferred to another dealer or used for self consumption or as gift;

(e) Inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and used in the manufacture of goods which have been lost, stolen or destroyed; and

(f) Inputs purchased by the dealer from another registered dealer and consumed in the manufacture of goods part of which are specified in Schedule IV of the Act.

(2) A manufacturing dealer shall first compute the input-output ratio by applying the following Formula:

K = (OB + PR – CB) ÷ V; where ,

K = The input-output ratio for the immediately preceding year;

OB = The value of opening stock of all goods on the first day of the immediately preceding year;

PR = The value of all goods purchased during the immediately preceding year;

CB = The value of closing stock of all goods on the last day of the immediately preceding year; and

V = The aggregate of the sale of goods sold within the state, sales in the course of inter-state trade and commerce, stock transfers, exports and sales of goods specified in Schedule I of the Act during the immediately preceding year.

Provided that the value of K shall be taken at 0.85 in the case of a dealer commencing business at any time after the appointed date.

(3) After computing the value of K as aforesaid, the dealer shall compute the reverse credit that he has incurred during a month on account of:

(a) Sales by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I, which shall be the amount arrived at after applying the following Formula:

R7 = (H x K x I) ÷ P; where ,

R7 = The reverse credit on account of sales by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

H = The total value of sales by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

K = The input-output ratio computed under sub-rule (2) as aforesaid;

I = The input tax paid by the dealer on purchase of inputs, other than those specified in Schedule I, during the month;

P = The value of goods, other than goods specified in Schedule I of the Act, purchased during the month from within the state.

(b) Stock transfers effected within the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I, which shall be the amount arrived at after applying the following Formula:

R8 = (J x K x I) ÷ P; where ,

R8 = The reverse credit on account of stock transfers effected within the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

J = The total value of stock transfers effected within the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

K = The input-output ratio computed under sub-rule (2) as aforesaid;

I = The input tax paid by the dealer on purchase of inputs, other than those specified in Schedule I, during the month;

P = The value of goods, other than goods specified in Schedule I of the Act, purchased during the month from within the state.

(c) Stock transfers effected outside the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I, which shall be the amount arrived at after applying the following Formula:

R9 = (L x K x 4) ÷ 100; where ,

R9 = The reverse credit on account of stock transfers effected outside the

State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

L = The total value of stock transfers effected outside the State by a manufacturer of goods specified in Schedule I and which have been manufactured by him from inputs other than those specified in Schedule I;

K = The input-output ratio computed under sub-rule (2) as aforesaid;

(d) Inputs purchased by the dealer from another registered dealer which have been used by him in the manufacture of such goods the right wherein to use is transferred to another dealer or have been used for self consumption or as gift, which shall be the amount arrived at after applying the following Formula:

R10 = (M x K x I) ÷ P; where ,

R10 = The reverse credit on account of goods the right wherein to use is transferred to another dealer or used for self consumption or as gift;

M = The aggregate of the values of goods the right wherein to use is transferred to another dealer or used for self consumption or as gift;

K = The input-output ratio computed under sub-rule (2) as aforesaid;

I = The input tax paid by the dealer on purchase of inputs, other than those specified in Schedule I, during the month;

P = The value of goods, other than goods specified in Schedule I of the Act, purchased during the month from within the state.

(e) Inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and used in the manufacture of goods which have been lost, stolen or destroyed which shall be the amount arrived at after applying the following Formula:

R11 = (N x K x I) ÷ P; where ,

R11 = The reverse credit on account of inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and used in the manufacture of goods which have been lost, stolen or destroyed;

N = The aggregate of the values of inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and used in the manufacture of goods which have been lost, stolen or destroyed;

K = The input-output ratio computed under sub-rule (2) as aforesaid;

I = The input tax paid by the dealer on purchase of inputs, other than those specified in Schedule I, during the month;

P = The value of goods, other than goods specified in Schedule I of the Act, purchased during the month from within the state.

(f) In respect of inputs purchased by the dealer from another registered dealer and consumed in the manufacture of goods part of which are specified in Schedule IV of the Act which shall be the amount arrived at after applying the following Formula:

R12 = (O x I) ÷ Q; where ,

R12 = The reverse credit on account of goods manufactured by a manufacturer part of which are specified in Schedule IV of the Act;

O = The aggregate of the quantities of goods manufactured which are specified in Schedule IV of the Act;

I = The input tax paid by the dealer on purchase of inputs, other than those specified in Schedule I, during the month; and

Q = The aggregate of the quantities of all goods manufactured.