(1) Subject to the provisions of sub-section (5) and such restrictions and conditions as may be prescribed, a rebate of input tax as provided in this Section shall be claimed by or be allowed to a registered dealer in the circumstances specified below,-

(a) Where a registered dealer purchases any goods specified in Schedule II other than those specified in Part III and Part-Ill A of the said Schedule within the State of Madhya Pradesh from another such dealer after payment to him input tax for,-

 

(1) sale within the State of Madhya Pradesh or in the course of export out of the territory of India; or

(1a) sale in the course of inter-State trade or commerce; or

(2) consumption or use for/in the manufacture or processing or mining of goods specified in Schedule II for sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India; or

(3) use as packing materials in packing of goods specified in Schedule II; or

(4) use as plant, machinery, equipment and parts thereof in respect of goods specified in Schedule II; or

(5) consumption or use for/in the manufacture or processing or packaging of goods declared tax free under Section 16, for sale in the course of export out of the territory of India; or

(5-a) consumption or use for/in the manufacture or processing or packaging, other than mentioned in sub-clause (5) above, and in connection with sale of goods declared tax free under Section 16; or

(5-b) consumption or use as plant, machinery, equipment and parts thereof for/in generation, transmission or distribution of electrical energy; or

(6) disposal of,-

(i) such goods, or

(ii) in case of goods referred to in sub-clause (1a), which is equal to the amount of input tax or the amount of Central Sales Tax payable under the Central Sales Tax Act, 1956 (No. 74 of 1956) on such sale, whichever is less;

(iii) goods specified in Schedule II, manufactured or processed or mined out of such goods, otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India,

he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax,

(i) in case of goods referred to in sub-clauses (1), (2), (3), (4) and (5); and

(ii) in case of goods referred to in sub-clauses (5-a), (5-b) and (6), which is in excess of 5 percent of the purchase price, net of input tax, of such goods.

Provided that in respect of the goods consumed in manufacture of goods specified in Schedule II as may be notified and the goods so manufactured are disposed off otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India, he shall claim or be allowed input tax rebate of the amount of such input tax, which is in excess of 2 percent:

Provided further that in respect of the goods consumed in manufacture or processing of goods specified in Schedule I as may be notified and the goods so manufactured or processed are disposed off otherwise than by way of sale in the course of export out of the territory of India, he shall claim or be allowed input tax rebate of the amount of such input tax, which is in excess of 2 percent.

Explanation.-

Where a manufacturing process results in manufacture of Schedule I as well as Schedule II goods, input tax rebate shall be computed after apportioning the input tax in proportion to the value of Schedule I and Schedule II goods so manufactured.

(b) Where a dealer makes an application for grant of a registration certificate under clause (a) or clause (b) or clause (c) of sub-section (2) of Section 17 on or after the commencement of the Act, he shall, in respect of goods specified in Schedule II other than those specified in Part III and Part-Ill A of the said Schedule, purchased on or after such commencement by him within the State of Madhya Pradesh from another such dealer after payment to him input tax and held in stock by him on the date of validity of the registration certificate issued to him under clause (a) or clause (b) or clause (c) of sub-section (2) of Section 17, claim or be allowed input tax rebate of the amount of such tax in accordance with the provisions of clause (a) above.

(c) Where a registered dealer who has opted for composition under Section 11 for a year, does not opt for composition in subsequent year, he shall claim or be allowed input tax rebate in respect of the goods held in stock on the date of commencement of the subsequent year in accordance with the provisions of clause (a) above.

(d) Omitted w.e.f. 1-4-2011.

(e) Notwithstanding anything contained in clause (a), where a dealer, who is a builder and developer carrying on the business of constructing residential and / or commercial buildings, makes an application for grant of a registration certificate under clause (a) of sub-section (2) of Section 17 after the prescribed period but before 31st March, 2008, he shall, in respect of goods specified in Schedule II other than those specified in Part III and Part-Ill A of the said Schedule, purchased on or after date of liability, by him within the State of Madhya Pradesh from a registered dealer after payment to him input tax, claim or be allowed input tax rebate of the amount of such tax in accordance with the provisions of clause (a) above.

(1A) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases natural gas as specified in Part III and Part-Ill A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax and consumes the natural gas so purchased in generation of electrical energy, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax which is in excess of 5 percent of the purchase price net of input tax of such natural gas.

(1AA) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases natural gas as specified in Part III and Part-Ill A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax and consumes the natural gas so purchased as fuel in manufacture or processing of goods and the goods manufactured are sold within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AB) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases natural gas as specified in Part-III A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax, and sells the natural gas so purchased within the State of Madhya Pradesh, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AC) (a) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases diesel and petrol as specified in Part-IIIA of Schedule II within the State of Madhya Pradesh from another such dealer after paying him input tax, and sells the diesel and petrol so purchased within the State of Madhya Pradesh, he shall claim or be allowed, in such manner and within such period as may prescribed, input tax rebate of the amount of such input tax.

(b) Notwithstanding anything contained in clause (a), where a dealer, who is registered under the Madhya Pradesh Goods and Services Tax Act, 2017 (No. 19 of 2017), gets himself registered under Section 17 by making an application for grant of a registration certificate after the prescribed period but before 31st March, 2021, he shall, in respect of diesel and petrol specified in Part-IIIA of Schedule II purchased on after date of liability to pay tax by him within the State of Madhya Pradesh from a registered dealer after payment to him input tax, claim or be allowed input tax rebate of the amount of such tax in accordance with the provision of clause (a) above. However, no refund shall be given if the input tax is more than the liability to pay the output tax.

(1AD) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases tendu leaves as specified in Part-III A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax, and

(a) sells the tendu leaves so purchase within the State of Madhya Pradesh; or

(b) consumes the tendu leaves so purchased in manufacture of bidi and the bidi so manufactured is sold within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India.

he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AE) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases timber as specified in Part-Ill A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax, and

(a) sells the timber so purchased within the State of Madhya Pradesh; or

(b) consumes the timber so purchased in manufacture of ready to use furniture and the furniture so manufactured is sold within the State of Madhya Pradesh or in the course of inter-state trade or commerce or in the course of export out of the territory of India,

he shall claim or be allowed in such manner" and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AF) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases timber as specified in Part-Ill A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax, and consumes the timber so purchased in manufacture of goods specified in Schedule II other than ready to use furniture, and the goods so manufactured are sold within the State of Madhya Pradesh, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AG) Notwithstanding anything to the contrary contained in clause (ix) of sub-section (6) and subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases goods notified under section 9-A within the State of Madhya Pradesh from another such dealer after payment to him input tax and consumes the goods so purchased in manufacture of goods specified in Schedule II, and the goods so manufactured are sold within the State of Madhya Pradesh, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AH) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases cigars, cheroots, cigarettes, cigarillos of tobacco, bidies and other manufactured tobacco products including gudaku and pan masala, as specified in Part-Ill A of Schedule II within the State of Madhya Pradesh from another such dealer after payment to him input tax, and sells the cigars, cheroots, cigarettes, cigarillos of tobacco, bidies, and other manufactured tobacco products including gudaku and pan masala so purchased within the State of Madhya Pradesh, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1AI) Subject to such restrictions and conditions as may be prescribed, where a registered dealer purchases telephone, cellular hand set and phablet, pan masala and gutka (whithout tobacco) as specified in Part-Ill A of Schedule II within the Slate of Madhya Pradesh from another such dealer after payment to him input tax, and sells the telephone, cellular hand set and phablet, pan masala and gutka (without tobacco) so purchased within the State of Madhya Pradesh, he shall claim and be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax.

(1-B) Subject to such restrictions and conditions as may be prescribed, where a registered dealer sells the goods as may be notified by the State Government, and the dealer consumes the goods purchased by him within the State of Madhya Pradesh from another such dealer after payment to him input tax, in the manufacture of such notified goods, he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such tax. The provisions of clause (a) of sub-section (1) shall mutatis mutandis apply to the input tax rebate claimed or allowed under this sub-section.

(2) Notwithstanding any thing contained in this Act, where- 

(a) any official or personnel of -

(i) any foreign diplomatic mission or consulate in India; or

(ii) the United Nations Organisation or any other similar international body,

entitled to privileges under any convention to which India is a party or under any law for the time being in force; or

(b) any consular or diplomatic agent of any mission, the United Nations Organisation or other body referred to in sub-clause (i) or sub-clause (ii) of clause (a),

purchases any goods specified in Schedule II other than those specified in Part III and Part-III A of the said Schedule within the State of Madhya Pradesh from a registered dealer after payment to him input tax for himself or for the purposes of such mission, United Nations Organisation or other body, he shall be entitled to claim or be allowed, in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax and such rebate shall be granted by way of refund.

(3) The input tax rebate by a registered dealer under this Section shall be adjusted in such manner as may be prescribed towards the tax, interest and penalty payable by him under this Act or under the Central Sales Tax Act, 1956 (No, 74 of 1956). The balance, if any, may be carried over for adjustment in the subsequent year and if not carried over, shall be granted by way of refund after assessment of the relevant financial year.

(4) Notwithstanding any thing contained in sub-section (3), if any amount of input tax rebate in respect of the goods purchased by a registered dealer being,

(i) for sale in the course of export out of the territory of India; or

(ii) for consumption or use for/in the manufacture or processing or mining of goods for sale; or

(iii) for use as plant, machinery, equipment and parts thereof; or

(iv) for sale as canteen stores.

(v) for sale or supply to the Central Government or State Government; or

(vi) natural gas consumed in generation of electrical energy.

is not adjustable towards any tax payable by him, such rebate shall be granted by way of refund. 

(5) (a) (i) Where a registered dealer has claimed and adjusted input tax rebate towards the tax payable by him according to his return or returns, such dealer shall in the event of disposal of,

(a) goods; or

(b) goods, specified in Schedule II, manufactured or processed or mined out of the goods,

otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India, be liable to pay the amount of input tax or the amount at the rate of 5 percent of the purchase price, net of input tax, of such goods, whichever is lower, towards the input tax rebate in respect of the aforesaid goods adjusted by him.

Provided that in case of goods manufactured being goods notified under first proviso of clause (a) of sub-section (1), the amount at the rate of 2 percent shall be payable.

(ii) Where a registration certificate of a registered dealer who has claimed and adjusted input tax rebate towards the tax payable by him according to his return or returns, is cancelled under sub-section (10) of Section 17, such dealer shall pay the amount claimed by way of input tax rebate in respect of the goods held in stock by him on the date the order of cancellation of the registration certificate takes effect.

(b) Where the amount of tax or the amount of input tax rebate which a registered dealer is liable to pay under clause (a) is not adjustable towards any input tax rebate to his credit, such dealer shall be liable to pay on the amount so payable interest at the rate of 1.5 percent per month for the period commencing from the date such amount has become due to the date of its payment.

(6) No input tax rebate under sub-section (1) shall be claimed or be allowed to a registered dealer,-

(i) in respect of any goods specified in Schedule II purchased by him from another such dealer for sale but given away by him by way of free sample or gift or given to or received by him by way of replacement;

(ii) in respect of goods specified in Schedule II for use or consumption for manufacture or processing or mining of goods but the goods manufactured or processed or mined are given away by him by way of free sample or gift or given to or received by him by way of replacement;

(iii) in respect of goods purchased by him from another such dealer who opts for the composition of tax under the provisions of Section 11 and 11-A;

(iv) who opts for composition under Section 11;

(v) Omitted.

(vi) in respect of plant, machinery, equipment and parts thereof, as may be notified by the State Government.

(vii) in respect of goods, the amount of bill, invoice or cash memorandum of which exceeds rupees forty thousand, any payment of which has not been made by crossed cheque or bank draft or pay order or internet banking of a scheduled bank :

Provided that in respect of the transactions referred to in explanation (d) of clause (u) of Section 2, payment by book adjustment shall be deemed to be a compliance of the above requirement.

(viii) in respect of goods, the amount of tax included in bill, invoice or cash memorandum of which exceeds rupees one thousand and it has not been authenticated in accordance with the provision of sub-section (1-A) of Section 40.

(ix) in respect of goods notified under Section 9-A;

(x) in respect of goods, the bill, invoice or cash memorandum of which does not indicate registration certificate number of the purchasing registered dealer as mentioned therein by the selling registered dealer.

(6-A) Notwithstanding anything to the contrary contained in this section, in no case the amount of input tax rebate on any purchase of goods shall exceed the amount of tax in respect of such purchase of goods, actually paid under the Act, into the Government Treasury:

Provided that if a registered dealer (selling dealer) has furnished return of a period, the tax in respect of the purchases made by a registered dealer from the selling dealer during the period shall ordinarily be deemed to have been paid for the purpose of this sub-section, unless it is found otherwise.

(7) (a) The State Government, if it deems fit, may, by notification specify any goods mentioned in Part III of Schedule II for the purpose of claiming or allowing input tax rebate under this Section, when such goods are purchased by a registered dealer from another such dealer within the State of Madhya Pradesh,-

(i) after payment to him of tax under Section 9, or

(ii) which are tax paid goods at the hands of the selling registered dealer,

for use or consumption of such goods for / in the manufacture or for / in mining of any goods for sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India and thereupon the input tax rebate in respect of such goods shall be claimed or be allowed in such manner, to such extent, within such period and subject to such restrictions and conditions as may be specified in the notification.

(b) The provisions of clause (b) of sub-section (1) and sub-sections (3) to (5) shall apply to input tax rebate that may be claimed or allowed in respect of goods referred in clause (a).