(1) An input tax credit claimed in respect of goods in hand at the time of registration shall be allowed if the dealer has an invoice or invoices proving that the goods were purchased by him within the State and within three months preceding the date of commencement of validity of registration certificate:

Provided that in working out the input tax credit, the purchases made during the period prior to the appointed day, if any, shall be excluded.

(2) Where a registered dealer manufactures any goods, the sales of which are taxable and exempt, the following conditions shall apply for arriving at the eligible input tax credit-

(i) where all the sales of a registered dealer for that tax period are taxable, the whole of the input tax may be claimed as a credit.

(ii) where only a part of the sales of a registered dealer for any tax period is taxable, the amount of input tax credit shall be worked out in proportion of taxable turnover to the turnover of sales of goods on the purchases of which input tax credit is claimed.

(iii) Where a registered dealer makes sale of taxable goods, exempt goods and exempt transaction in a tax period, he shall make the calculation of input tax credit in proportion to such sales. Input tax credit in respect of stock transfers will be subject to the provisions of sub-section (3) of section 6 of the Act.

Explanation:-"exempt transactions" means stock transfers and consignment sales.

(3) (i) No input tax credit shall be available to the purchasing registered dealer in respect of purchases made by him on the strength of sale bill or cash memorandum.

(ii) No input tax credit shall be available to the purchasing registered dealer in respect of purchases made from outside the State.

(iii) No input tax credit shall be available to the registered dealer in respect of exempt sales.

(iv) No input tax credit shall be available to the Depot of Canteen Stores Department (I) and Indian Naval Canteen Services located in Goa, in excess of output tax payable, in respect of the goods sold by them either directly through retail outlet or through Canteen Stores to the members of Armed Forces, Civilian Personnels, paid from Defence Estimates, and to Ex-service Personnel stationed in Goa.

(4) Invoice to be issued by industrial unit covered under the Goa Sales Tax Deferment-cum-Net Present Value Compulsory Payment Scheme, 2003 or under the modified or replaced new Scheme, shall be termed as "Restrictive Tax Invoice" and input tax credit admissible against such purchases shall be governed as per relevant condition in the said scheme.