13. Credit For Input Tax
(1) Subject to the conditions if any, prescribed, an input tax credit shall be allowed to the VAT dealer for the tax charged in respect of all purchases of taxable goods, made by that dealer during the tax period, if such goods are for use in the business of the VAT dealer. No input tax credit shall be allowed in respect of the tax paid on the purchase of goods specified in Schedule VI.
(2)(a) A dealer registered as a VAT dealer on the date of commencement of the Act, shall be entitled to claim for the sales tax paid under Andhra Pradesh General Sales Tax Act, 1957 on the stocks held in the State on the date of commencement of the Act subject to the conditions and in the manner as may be prescribed:
Provided that such goods should have been purchased from 01-04-2004 to 31-03-2005 and are goods eligible for input tax credit.
(b) Subject to the conditions if any, prescribed, input tax credit shall be allowed to a VAT dealer on registering as VAT dealer if any input tax is paid or payable in respect of all purchases of taxable goods, where such goods are for use in the business as VAT dealer, provided the goods are in stock on the effective date of registration and such purchase occurred not more than three months prior to such date of registration.
(3) A VAT dealer shall be entitled to claim :-
(a) input tax credit under sub-section (1), on the date the goods are received by him, provided he is in possession of a tax invoice;
(aa) input tax credit under sub-section (1) only when the selling dealer has paid the tax in respect of the same goods under the Act.
(b) input tax credit or sales tax credit under sub-section (2), on the date of registration, provided he is in possession of documentary evidence therefor.
(4) A VAT dealer shall not be entitled for input tax credit or sales tax credit in respect of the purchases of such taxable goods as may be prescribed.
(5) No input tax credit shall be allowed on the following:
(a) works contracts where the VAT dealer pays tax under the provisions of clauses (b),(c) and (d) of sub-section (7) of Section4;
(b) transfer of a business as a whole;
(c) sale of exempted goods except when such goods are sold in the course of export or exported outside the territory of India ;
(d) exempt sale;
(e) transfer of exempted goods on consignment basis or to branches of the VAT dealer outside the State otherwise than by way of sale;
(f) *(……)*( The words “supply of goods by the VAT dealer as mentioned in sub-section (9) of Section 4.” are omitted by Act No 10 of 2006 dated 4th January 2006 , w.e.f 1-12-2005)
(g)the transaction on which VAT dealer pays the tax under sub-section (8A) OF section 4 of the act
(h)the supply or sale of goods, on which a VAT dealer pays tax under clause(b) and (d) of sub-section (9) of section 4 of the Act.
(i)transaction on which tax is paid or payable under sub-section (11) of section 4.
(j)the sale of goods on which a VAT dealer pays tax under sub-section (12) of section 4 of the act.
(k)Purchase of goods made by a VAT dealer which are subsequently destroyed or lost and therefore do not have correspondance sales. The Input Tax Credit claimed on such purchases shall be reserved in the return for the month in which such goods are lost or destroyed.
(5A)Notwithstanding anything contained in sub-section (5), the resident principal who receives the goods purchased on his behalf by his agent, is eligible to claim input tax credit on such goods subject to the possession of a declaration in the Form, as may be prescribed.
(5B) Notwithstanding anything contained in sub-section (5), a VAT dealer acquiring any business as an ongoing concern and continuing the same business activity after the acquisition shall, subject to the condition as may be prscribed be eligible to claim Input Tax Credit available to such business as on the date of such transfer.
(6) The input tax credit for transfer of taxable goods outside the State by any VAT dealer otherwise than by way of sale shall be allowed for the amount of tax in excess of 4%.
(7) Where any VAT dealer pays tax under clause (a) of sub-section (7) of Section 4, the input tax credit shall be limited to 90% of the related input tax.
(8) Where goods purchased by a VAT dealer are partly for his business use and partly for other than his business use, the amount of the input tax credit shall be limited to the extent of input tax that relates to the goods used in his business.
(9) A Turnover Tax dealer or a casual trader shall not be entitled to claim input tax credit.
(10) Any dealer covered by Explanation III & IV of clause (10) of Section 2 shall not be eligible for input tax credit against or relatable to sale of un-serviceable goods or scrap, surplus, old, obsolete or discarded material or waste products whether by auction or otherwise.
(11) Any VAT dealer who purchases any taxable goods from a dealer covered under sub-section (10) above, shall be eligible for input tax credit, on production of documentary evidence that tax has been charged.
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