14. Reverse Credit in case of a Non-Manufacturer

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

(a) Stock transfers effected within the State out of goods purchased from within the State after paying thereon the tax leviable either under the Act or the earlier law;

(b) Stock transfers effected outside the State out of goods purchased from within the State after paying thereon the tax leviable either under the Act or the earlier law;

(c) Goods returned by the purchasing dealer in terms of sub-rule (5) of Rule 18;

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

(e) 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; and

(f) Inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and which have been lost, stolen or destroyed.

(2) The dealer shall compute the reverse credit that he has incurred during a month on account of -

(a) The value of stock transfers within the state, which shall be the amount arrived at after applying the following Formula -

R1 = [(A x I) ÷ P]

Where,

R1 = The reverse credit on account of stock transfers within the state;

A = The total value of stock transfers within the state;

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

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

(b) The value of stock transfers outside the state, which shall be the amount arrived at after applying the following Formula

R2 = [B X I) » P]

Where,

(c) In respect goods returned by the purchasing dealer in terms of sub-rule (5) of Rule 18, which shall be the amount arrived at after applying the following

Formula:

R3 = (C x Rt) ÷ 100

Where,

R3 = The reverse credit incurred by the purchasing dealer on account of goods returned by the purchasing dealer in terms of sub-rule (5) of Rule 18;

C = The value, exclusive of tax, of the goods returned by the purchasing dealer in terms of sub-rule (5) of Rule 18; and

Rt = The rate of tax applicable to the goods.

(d) In respect of inputs purchased by the dealer from another registered dealer and the right wherein to use is transferred to another person or used for self consumption or as gift which shall be the amount arrived at after applying the following formula:

R4 = (D x I) ÷ P

Where,

R4 = 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;

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

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) 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:

R5 = (E x I) ÷ F

Where,

R5 = The reverse credit on account of goods manufactured by a manufacturer part of which are specified in Schedule IV of the Act;

E = 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

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

(f) Inputs purchased by the dealer from another registered dealer on which input tax credit has been claimed by the purchasing dealer and which have been lost, stolen or destroyed which shall be the amount arrived at after applying the following formula:

R6 = (G x I) ÷ P ; where,

R6 = 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 which have been lost, stolen or destroyed;

G = The aggregate of the purchase values of inputs purchased by the dealer from another registered dealer on which input tax credit has been claimedby the purchasing dealer and which have been lost, stolen or destroyed;

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.