Conditions for grant of set-off or refund or adjustment of drawback, set-off [Rule 55]
(a) The dealer shall be a registered dealer. If a dealer has obtained registration in any
particular financial year, then he would be eligible claim set-off in respect of the
purchases effected prior to date of registration if the goods purchased are treated as
capital assets or are used, consumed disposed or sold after the date of registration.
(b) The dealer has to maintain chronological record of all the purchases of goods made
by him showing the following details : – (A) The date of purchase; (B) The name of
the selling dealer and his registration certificate number, and the description of the
goods; (C) The number of the tax invoice; (D) The purchase price of the goods; (E)
The amount of tax recovered from him by the selling dealer; and (F) Where
applicable the amount of the tax recovered under each of the earlier laws separately.
(c) Original tax invoice : The claimant dealer should produce before the Commissioner
the relevant original bill/invoice/cash memorandum to claim set-off.
(d) Adjustment / Refund : The set off can be adjusted against the tax payable
according to the return, against CST payable towards that period or against the entry
tax payable under the Maharashtra Tax on Entry of Goods into Local Areas Act,
2003. After above adjustment, the dealer may claim refund of the excess or can carry
forward the excess towards tax payable as per return to be filed for any subsequent
period in the same year including the tax under CST Act or the Maharashtra Tax on
Entry of Goods into Local Areas Act, 2003.
(e) Refund set-off against dues : The amount of refund due shall be applied by the
Commissioner towards the recovery of any pending tax dues for which demand
notice has been issued. The dealer can claim the balance left, if any after all the
above adjustment, by way of refund.
(f) FIFO method : 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 that the goods were used or consumed in the
chronological order in which they were acquired i.e. First in First out (FIFO) method.
(g) Entry Tax : 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 is also
eligible for set-off.
(h) Successor : A dealer succeeding the business can take credit of any set off that is
carried forward in the event of death, transfer, or disposal of the business.
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