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15 Second-hand goods
(1) This sectio applies where –
(a) a registered dealer sells second-hand goods;
(b) the registered dealer has purchased goods from a resident seller who was not registered
under this Act;
(c) the goods were purchased either as trading stock for re-sale in an unmodified form or
otherwise or as raw material for incorporation or division into trading stock;
(d) the registered dealer will be liable to tax under section 3 of this Act on the sale of the
goods or the goods into which they were incorporated, as the case may be; and
(e) the registered dealer has adequate proof of the amount paid for the goods.
(2) In the circumstances mentioned in sub-section (1) of this section, the registered dealer
shall be entitled to a tax credit for the purposes of section 9 of this Act of the least of –
(a) the input tax borne by the resident seller when he purchased the goods;
(b) the tax fraction of the original cost of the goods to the resident seller;
(c) the tax fraction of the fair market value of the goods at the time of their purchase by the registered dealer; or
(d) the tax fraction of the consideration paid by the registered dealer for the goods. 4[Explanation I.- For the purpose of this sub-section, the words “input tax borne” means the tax paid by the resident seller under the Delhi Sales Tax Act, 1975 (Act 43 of 1975) or under this Act and the word “tax fraction” shall be construed accordingly. Explanation II.- This section shall apply only if the resident seller had purchased goods in Delhi.]
(3) Where the amount paid by the registered dealer for the goods exceeds two thousand
rupees, the tax credit shall be allowed in the tax period when the goods are sold by the registered dealer or the goods into which they have been incorporated are sold by the registered dealer.
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Amit R Gupta
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