Computation of output tax, purchase tax, input tax and tax due. Sections 3 and 8
(1) Out put tax in respect of a VAT dealer for a tax period is the aggregate of tax calculated on the sale of taxable goods made by him in the State during the tax period. It shall be represented by total of entries in column (h) in the Day Book (Sale side) prescribed in rule 53.
(2) Any goods purchased in the State by a VAT dealer on the sale of which to him no tax is levied or paid under the Act and such goods are used or disposed of by him during a tax period in the circumstances that no tax is payable by him under the Act or the Central Act on them or the goods manufactured therefrom, then he shall, except when such goods not being the goods specified in Schedule F, or the goods manufactured from such goods are sold in the course of export of goods out of the territory of India, be liable to pay tax on the purchase of such goods at the rate(s) specified in clause (b) of sub-section (1) of section 7.
(3) Input tax in respect of a VAT dealer for a tax period is the aggregate of tax paid in respect of goods purchased in the State from other VAT dealer(s) on tax invoice(s) during the tax period, which shall be the aggregate of entries made in column (g) in the Day Book (Purchase side) in respect of the said period, as reduced by the amount of tax paid in respect of goods specified in Schedule E, when used, intended to be used or disposed of during the said period or when left in stock at the end of the said period, in the circumstances mentioned therein against such goods. The amount to be reduced shall be calculated pro rata where the goods specified in Schedule E have been partly used or disposed of in the circumstances mentioned therein and partly otherwise.
Illustration – The aggregate of entries made in column (g) in the Day Book (Purchase side) in respect of a tax period in case of a VAT dealer D is Rs.10,000. D exported goods worth Rs.1,00,000/- out of State (sent for sale on consignment) during the said period. These goods were purchased by him in the State from VAT dealers on tax invoices over a span of past three tax periods on payment of tax aggregating to Rs.8,000. D’s input tax is Rs.2,000.
(4) The tax due required to be paid by a VAT dealer for a tax period shall be the output tax, calculated under sub-rule (1), plus the purchase tax, calculated under sub-rule (2), minus the input tax, calculated under sub-rule (3). Arithmetically put:
Tax due = Output tax + purchase tax – input tax.