Maharashtra VAT Rules

Non-Admissibility Of Set-Off.
No set-off under any rule shall be admissible in respect of,

1. purchases of motor vehicles (not being goods vehicles) which are treated by the claimant dealer as capital assets and parts, components and accessories thereof unless the claimant dealer is engaged in the business of transferring the right to use [whether or not for a specified period] for any purpose, in respect of the said vehicles and the expression ''motor vehicles'' and ''goods vehicles'' shall have the same meanings as respectively assigned to them in the Motor Vehicles Act, 1988;
2. purchases of motor spirits as notified under sub-section (4) of section 41 unless such motor spirits are resold or sold in the course of inter-State trade or commerce or in the course of export out of the territory of India or are sent, not by reason of sale, outside the State to any place within India by the claimant dealer to his own place of business, or the place of business of an agent or where the claimant dealer is a commission agent, to the place of business of his principal;
3. purchase of crude oil as described in section 14 of the Central Sales Tax Act, 1956, when used by an oil refinery for refining;
4. any purchases made by a dealer falling under entries (i), (ii), (iv), (v), (vii) and (ix) of the Explanation to clause (8) of section 2;
5. any purchase of consumables or of goods treated as capital assets by the claimant dealer where the dealer is principally engaged in doing job work or labour work and is not engaged in the business of manufacturing of goods for sale by him and incidental to the business of job work or labour work any waste or scrap goods are obtained and are sold;
6. any purchase made by any dealer to whom an Entitlement Certificate to claim incentives by way of exemption from tax or deferment of tax has been granted, being purchases of raw materials as defined in rule 58.
7. any purchase of goods of incorporeal or intangible nature other than import licence, exim scrips, special import licence, duty free advance licence, export permit or licence or quota and credit of duty entitlement pass book and in the hands of a dealer who is trading in software, purchases of software packages.

Condition For Grant Of Set-Off Or Refund And Adjustment Of Draw-Back, Set-Off In Certain Circumstances.

1. No set-off or refund under these rules shall be granted to a dealer in respect of any amount of tax recovered from him on the purchase of any goods or paid by him or in respect of entry of any goods, -

   unless such dealer was a registered dealer under the Act or a registered dealer or, as the case may be, a person holding license under any earlier law at the time of such purchase or entry;

   unless such dealer has --

   maintained a true account in chronological order of all the purchases of goods made by him on or after the appointed day, showing the following details:--

   1. the date on which the goods were purchased;
   2. the name of the selling dealer and his registration certificate number, if registered, from whom the goods are purchased, and the description of the goods;
   3. the number of the tax invoice under which they were purchased;
   4. the purchase price of the goods;
   5. the amount of sales tax, if any, recovered from him by the selling dealer;

      in the case of goods in respect of the purchase of which tax has been recovered from the claimant dealer or is payable by him as purchase tax under an earlier law, maintained a true account in chronological order of the goods so purchased and held by him on the appointed day, which shall show the particulars mentioned at (A) to (E) above, and the amount of tax recovered under each of the earlier laws separately.

      The claimant dealer shall, if so required, produce before the Commissioner the original bill/invoice/cash memorandum relating to each purchase in respect of which the claim for set-off has been made in respect of any purchase made before the appointed day, and a tax invoice in respect of any purchase made after the appointed day.

      A dealer who by virtue of these rules, has, in any period become entitled to a sum by way of set-off or refund, may, subject to the other provisions of this rule, adjust such sum against the tax payable according to the return relating to such period. If the sum admissible for such adjustment is in excess of the tax payable according to the said return, the claimant dealer may, at his option, adjust such excess or, as the case may be, part of the excess towards the Central Sales Tax payable by him under the Central Sales Tax Act, 1956, according to the return under the said Act relating to the said period or, may adjust such excess or any balance excess against the tax payable according to the return for any subsequent period falling in the same year.

      Where a notice under sub-section (4) of section 32 or, as the case may be, a notice under the corresponding provisions of any earlier law has been issued for the payment of any sum by a dealer or the dealer has filed any return or revised return without full payment of tax and who is entitled to a refund under these rules or, as the case may be, under any earlier law, the amount so due by way of refund, shall first be applied towards the recovery of the amount in respect of which such notice has been issued or towards the payment of the said tax and the balance amount, if any, shall thereafter be claimed as refund.

      Where the claimant dealer is unable to identify the goods purchased with the goods resold or with the goods used in the manufacture of goods or in the packing of goods, it shall be presumed for the purpose of reduction or disallowance of set-off that the goods so purchased have been used or consumed in the chronological order in which they were acquired whether before or after appointed day.

      Set-off of the tax paid under the Maharashtra tax on Entry of Motor Vehicles into the Local Areas Act, 1987 and of the tax paid under the Maharashtra Tax on Entry of Goods into the Local Areas Act, 2002 in respect of any goods shall be granted to a dealer as if such tax is a tax levied under this Act or, as the case may be, under any earlier law and all of the provisions of these rules including those relating to reduction in set-off and non-admissibility of set-off shall mutatis mutandis apply accordingly.

Reimbursement In Respect Of Declared Goods Purchased On Or After The Appointed Day.
Where a dealer is liable to pay tax under the Act then in assessing the amount of tax under this Act in respect of any period payable by such dealer (hereinafter referred to in this rule as ''the claimant dealer'', the Commissioner shall grant him in respect of declared goods purchased by him on or after the appointed day and resold by him in the course of inter-State trade or commerce and on which resale, tax under the Central Sales Tax Act, 1956 (LXXIV of 1956), has been paid by him, reimbursement of the tax paid by him on his purchases of the said goods.