(1) Consistent with the provisions of this Act, the State Government may prescribe the
circumstances in which and the goods in respect of which input tax credit shall be
neither claimed nor allowed.
(2) Where, in respect of any goods, a dealer has already claimed input tax credit against
the provisions of this Act or the rules framed there under or has wrongly claimed
input tax credit in respect of any goods, benefit of input tax credit to the extent it is
not admissible, shall stand reversed and such amount of reverse input tax credit shall
be deducted from the amount of input tax credit already claimed by the dealer in the
tax period in which event giving rise to reverse input tax credit has occurred:
Provided that where event, giving rise to reverse input tax credit, comes to the
notice of the dealer after the tax return, for the tax period in which such event has Reverse
input tax credit occurred, has been submitted, the dealer shall be liable to pay such amount of reverse input tax credit within thirty days after the event comes to the notice of the
dealer, along with simple interest at a rate of fifteen percent per annum for the
period commencing on the date following the last date prescribed for submitting tax
return of the tax period in which event has occurred and ending on the date on which
amount has been deposited.
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