(1) Claims in respect of input tax credit shall be made by a registered dealer in his return under section 24.

(2) The total amount of input tax credit to which a dealer is entitled during a month shall be the amount arrived at after applying the following Formula:

ITC = O + I + PT - R

Where,

ITC = The total amount of input tax credit to which the dealer is entitled during the month;

O = The tax paid, under the earlier law, on opening stock of such goods as had been purchased during the financial year 2004-05;

I = The tax paid on inputs purchased during the month, charged either in the tax invoice or through a debit note issued to the purchasing dealer;

PT = The purchase tax under section 4, if any, paid during the month by a manufacturing dealer; and

R = The amount of reverse credit, if any, incurred by the dealer during the month and computed in accordance with the provisions of rule 14 and rule 15:

Provided that in case the aggregate of the reverse credit computed in respect of a month exceeds the input tax paid on inputs purchased during the month, such excess shall be added to the output tax of the concerned month."

(2A) Notwithstanding anything contained in sub-rule (2), the amount of input tax credit in respect of capital goods to which a dealer is entitled, in accordance with clause (c) of sub-section (1) of section 16, shall be computed in the manner hereinafter provided.

(a) The input tax credit in respect of such capital goods as have been purchased from within Bihar on or after 01.04.2005, after paying tax under section 14 on such purchase, shall be claimed in the last month of the financial year commencing on 01.04.2007 and shall be the amount arrived at after applying the following formula:-

C = (TC - IC) » 2

Where,

C = The input tax credit in respect of such capital goods as have been purchased from within Bihar on or after 01.04.2005 after paying tax under section 14;

TC = The total tax paid on such capital goods as have been purchased from within Bihar on or after 01.04.2005; and

IC = The aggregate of the input tax credit on account of capital goods claimed by the dealer in the returns for the period commencing on 01.04.2005 and terminating on 31.03.2007 filed by him.

(3) For the purposes of this rule, no input tax credit shall be claimed in respect of inputs purchased or acquired from any place outside the State of Bihar.

(4) Any unadjusted input tax credit in respect of a month shall first be applied towards adjustment from the liability of the dealer under the Central Sales Tax Act, 1956 and only the balance, if any, remaining after such adjustment shall be carried forward for adjustment to the next month.

(5)(a) In case of goods purchased from inside the State and transferred either to consignment agent or branch or head office or to a sub contractor, the input tax credit shall be claimed by the transferee on the basis of the declaration in Form D-IV issued by the transferor. In such cases the value shown in the declaration in Form D-IV shall be deemed to be the value of purchase by the transferee.

(b) No input tax credit shall be available to a registered dealer for tax paid or payable at the time of purchase of goods if such goods are not sold because of any theft, loss or destruction for any reason, including natural calamity, and if a dealer has already taken any input tax credit against purchase of such goods the dealer shall incur a reverse tax credit at the end of the quarter in which such goods are stolen, lost or destroyed.

(6) The tax paid on the purchase of the following goods shall not qualify for input tax credit, if the same have been used as capital goods:

(a) Civil structure and immovable goods or properties;

(b) Vehicles of all types;

(c) Office equipment;

(d) Furniture, fixture including electrical fixtures and fittings.