(1) Subject to the provisions of sub-section (2), if the input tax credit of a registered dealer, determined under section 9 of this Act for a period exceeds the tax liability for that period, the excess credit shall be set off against any outstanding tax, penalty or interest under this Act or earlier law or under the Goa Tax on Entry of Goods Act, 2000 (Act 14 of 2000) or under the Central Sales Tax Act, 1956 (Central Act 74 of 1956).

(2) After adjustment under sub-section (1), the excess input tax credit of a registered dealer, other than those covered under sub-section (3), shall be carried over as an input tax credit to the subsequent period:

Provided that in case input tax credit at the end of the last quarter of the year exceeds rupees two lakhs, the dealer shall file an application in the prescribed form within three months to carry forward input tax credit and the Commissioner shall decide the same within three months from the date of filing of such application and thereafter the excess input tax credit, if any, shall be allowed to be carried forward accordingly:

Provided further that if any assessment, is done for the period then only the excess input tax credit as determined in the said assessment shall be allowed to be carried forward.

(3) In case of exporter selling goods outside the territory of India, the excess input tax credit, if any, admissible as per provision of this Act, proportionate to the goods exported and carried over at the end of any quarter shall be refunded in the prescribed manner within 3 months from the date of filing of application claiming the refund.

(4) Notwithstanding anything contained in sub-section (2), the Government may allow, carry forward of excess input tax credit, if any, to such shorter period and grant refund of unadjusted portion thereof in respect of such goods to such registered dealer on such conditions and at such proportion as may be specified by the Notification in the Official Gazette.

Explanation.- Omitted w.e.f.01-04-2011.