Government for reasonable restrictions on goods

BHUBANESWAR: To boost revenue generation, the State Government has decided to disallow input tax credit (ITC) on several goods.Announcing this on Wednesday, Finance Minister Prafulla Chandra Ghadei said some dealers in the mining and manufacturing sectors have been claiming ITC on purchase of certain goods by treating them as input in the manufacturing process. But such goods should not be treated as input as per definition in the statute, he said.The minister said the Orissa Value Added Tax Act, 2004, has given unrestricted rights to registered dealers to avail of ITC. There is a proposal for reasonable restrictions by appropriate legislation as is the case in many other states. The Act will be suitably amended to bring in these changes, he added.Accordingly, ITC will be disallowed on coal when used for generation of electricity for sale and captive use. Besides, it will also be disallowed on furnace oil except when purchased for resale and the same applies to kerosene.All automobiles, including commercial vehicles, two-wheelers and three-wheelers, required to be registered under the Motor Vehicles Act, 1988, are outside the purview of ITC expect when purchased for resale. Same goes for tyres and tubes, spare parts and other accessories.  ITC will not be allowed on air conditioning units except when purchased for resale or used in plant and laboratory. Similarly, no credit on earth moving equipment such as dozers, loaders and excavators, poclain, dumpers, tippers, machinery and equipment including accessories and component parts purchased for use in mining.The Government has also decided to disallow ITC on machinery and equipment including accessories and component parts purchased for use in construction activities such as mixer, road roller, paver and vibrator.There will also be no provision for ITC on fuels used for automobiles, captive power generation and power plants. Similarly, there will be no ITC on natural gas except when purchased for resale.