Computation of amount of reverse input tax credit by a trader.

22 (1) Where a dealer, who carries on exclusive business of purchase and re-sale of goods (hereinafter in this rule referred to as the trader) and who has claimed input tax credit of full amount of input tax in respect of any goods, uses, consumes, disposes of or dispossesses such goods in a manner in which he either is not entitled to claim any amount of input tax credit or is entitled to claim input tax credit of an amount which is lesser than the amount of input tax, shall compute amount of reverse input tax credit in respect of such goods.

(2) Amount of reverse input tax credit, in respect of any quantity or measure of any goods in respect of which a trader has not been entitled to claim any amount as input tax credit, shall be equal to the amount of input tax in respect of such quantity or measure of such goods.

(3) Amount of reverse input tax credit, in respect of any quantity or measure of any goods which have been consigned by the trader outside the State otherwise than by reason of an inter-

State sale, shall be computed using the expression:

P x R/100

Where, in respect of quantity or measure of goods consigned outside the State,-

(i) P is the purchase price, according to the tax invoice or purchase invoice in respect of which input tax credit has been claimed of full amount of input tax; and

(ii) R is rate of tax applicable to the commodity under the Act if it is less than 4 and in other cases is equal to 4.

(4) In respect of any quantity or measure of any goods held by a trader who-

(i) opts for payment of tax under section 6 , in opening stock on the date from which provisions of section 6 apply; and

(ii) discontinues his business, in closing stock, on the date on which he has discontinued business, amount of reverse input tax credit shall be computed in accordance with provisions of sub rule (2).