(1) Where input tax credit is already availed of by a registered dealer against purchase of goods and the goods so purchased are used, sold or disposed of in a manner envisaged in sub section (9) of section 20 which makes the dealer ineligible for Input Tax Credit, the input tax credit so availed of shall be deducted from the input tax credit for the tax period in which such event takes place.

(2) Where there is a negative input tax credit for a tax period, as a result of deductions made under sub-rule (1) the said negative amount will be paid along with the output tax as in the prescribed return.

(3) Omitted.

(4) Where a registered dealer fails to keep separate account of purchase of goods for the purpose of determining reverse tax credit under sub-rule (1), the input tax credit already availed shall be reversed in the following manner :

(i) In case of a registered dealer manufacturing or processing both taxable goods and goods exempted from tax for sale;

X = U x V
__
W

Where 'X' is the input tax credit to be reversed,

'U' is the input tax credit availed during the tax period,

'V' is the total sale value of goods manufactured or processed, exempt from tax in that period,

'W' is the total sale value of goods manufactured or processed in that tax period.

(ii) in case of a registered dealer selling taxable goods, a part of which is disposed off in the manner prescribed in sub-rule (1).

X = U x V
__
W

Where 'X' is the input tax credit to be reversed,

'U' is the input tax credit availed during the tax period,

'V' is the total estimated sale value of goods, disposed off in the manner prescribed in sub-rule (1) above in that period,

'W' is the total sale value of goods including the sale value of goods disposed off in the manner prescribed in sub-rule (1) above during that tax period.

(5) Where any registered dealer assigned with TIN sells any goods at a price less than the corresponding purchase price in any tax period, he shall furnish the particulars of sale of such goods in Annexure  VI of Form VAT-201.

(6) In the case of sale of goods in the manner referred to in sub-rule (5), which results in output tax less than the corresponding input tax paid on the purchase of such goods, the input tax creditable for the tax period shall be reversed as calculated in Annexure-VI of Form VAT-201.

(7) A registered dealer making sale of goods in the manner referred to in sub-rule (5), during the period commencing from 1st of June 2008 till the date on which sub-rule (5) and (6) come into force shall furnish information of such sale effected during the period mentioned above and the corresponding purchase price in Annexure-VI-A of Form VAT-201; and input tax credit for the tax period in which sub-rule (6) comes into force shall be reduced by the amount as calculated in the said Annexure.