Set off of tax paid on raw material and packing material in certain cases
Where tax has been paid on the purchase or sale of raw material or packing material inside the State and such raw material or packing material has been used in manufacture or packing of such goods as are notified by the State Government in this behalf and such goods are sold in the State or in the course of inter-State trade or commerce, the amount of tax paid on the purchase or sale of the raw material or packing material shall, subject to such conditions and restrictions as may be specified in the said notification, be deducted from the tax payable on the sale of such goods
(a) inside the State, to the extent that tax has been paid on the purchase or sale of raw material or packing material from which the goods sold inside the State were manufactured or packed;
(b) in the case of inter-State trade or commerce, to the extent the tax has been paid on the purchase or sale of raw material or packing material, from which the goods sold in the course of inter-State trade or commerce were manufactured or packed:
PROVIDED that the amount of tax to be deducted under clause (a) or clause (b) shall not exceed the amount of tax payable separately under this Act or the Central Sales Tax Act, 1956.
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