The Bombay Sales Tax Rules, 1959
Chapter VII : Grant of Draw Back, Set off and Refund
1[bst1] [R.42AA.Draw-back, set-off or refund of tax paid on purchases before the notified day by a Registered dealer holding a certificate of entitlement under entry 2[bst2] [E-2] of the Schedule appended to the GNFD No.3[bst3] ["STA.1059/37/Taxation-2, dated the 22nd September 1995"] :- In assessing the amount of tax payable by a Registered dealer (hereinafter in this rule referred to as the "claimant dealer") holding a certificate of entitlement granted to him under entry 2[bst4] [E-2] of the Schedule appended to the GNFD No.3[bst5] ["STA.1059/37/Taxation-2, dated the 22nd September 1995"], in respect of any period covered by the certificate of entitlement but not beyond the 30th June period covered by the certificate of entitlement but not beyond the 30th June 1981, the Commissioner shall grant him a draw back, set off or as the case may be, refund of the aggregate of the sum specified in clauses (a), (b) and (c) in respect of the purchases of raw materials made by the claimant dealer during the period specified in such certificate-
(a) a sum recovered from the claimant dealer by other Registered dealer by way of sales tax, or general sales tax, or as the case may be both on the purchases made by him such Registered dealers.
(b) a sum calculated in accordance with the provisions of sub-rule (2) on the purchase price of any goods specified in the then existing Schedules B, C, D or E purchases by the claimant dealer from another Registered dealer, otherwise, than against a certificate under sec. 11 or 12 or against a declaration in Form BC appended to the said notification, on the sale of which such Registered dealer had not charged tax other than the retail sales tax, separately, and in respect of which the claimant dealer proves to the satisfaction of the Commissioner that the tax leviable under the Act has been paid or has become payable on an earlier transaction in the same goods and products on demand, certificate in Form 31 issued by the aforesaid Registered dealer stating inter alia that the sale of the goods has been or will be included in the turnover of sales on which tax leviable under the Act, will if payable by him, be paid, before furnishing the relevant return.
(c) a sum calculated in accordance with the provisions of sub-rule (2) on the purchase price of any goods specified in the then existing Schedules E purchased by the claimant dealer from Registered dealer otherwise than against declaration in Form BC appended to the said notification either on furnishing a certificate under sec.42 or as the case may be where general sales tax is paid and on the sale of which the said Registered dealer has not charged sales-tax separately, and in if the claimant dealer shows to the satisfaction of the Commissioner-
(A) that the said goods were resold to him by the said Registered dealer after purchasing them from another Registered dealer on or after the appointed day; and
(B) that only sales-tax leviable under sec. 10 has been paid or has become payable on an earlier transaction in respect of the same goods; and produces, on demand, certificate in Form 31 or Form 31A as the case may be, issued by the said Registered dealer:
Provided that, no draw-back, set-off or refund under this rule shall be granted in respect of any purchases unless the claimant dealer proves to the satisfaction of the Commissioner that the goods so purchased have been used in the manner specified in sub-entry (b) of the said entry 4[bst6] [E-2].
(2)The sums referred to in clauses (b) and (c) of sub-rule (1) shall be calculated in accordance with the following formula, namely -
9P/10 x R/100+R
Where "P" means the purchase price of the goods and "R"means the rate of tax (other than retail sales tax) applicable to the sale of the goods;
Provided that, in the case of goods specified in the then existing Schedule E, for the purpose of clause (b), 'R' means the rate of sales tax and general sale tax not charged separately on the sale price, and for the purpose of clause (c) 'R' means the rate of sales-tax only :
Provided further that, the Commissioner may reduce the amount calculated in accordance with the formula given above to an amount not less than one third thereof, if after giving the claimant dealer a reasonable opportunity of being heard, the Commissioner is satisfied that the average price of similar goods sold by the manufacturers or importers thereof, was less than the purchase price paid by the dealer, by an amount more than ten percent, of such purchase price or that there is any other adequate reason, to be recorded in writing for so reducing the amount.
Explanation- For the purposes of this rule and rule 42AC, the expression "raw material" including components, intermediates, substance, consumables stores 5[bst7] [lubricants, fuels of all types,] 6[bst8] [newsprint purchased on or after the 1st January 1980, natural gas purchased on or after the 1st July 1995] or packing material which is utilised, by the holder or such certificate of entitlement as referred to in sub-rule (1) in the process of manufacture and packing of finished products or goods.