Input tax credit adjustment under VAT applies against current liability, with interest only on the remaining tax due.

Admissible input tax credit, once determined on assessment under the Gujarat VAT scheme, must be adjusted against the dealer's current-year output tax liability, and any remaining balance may then be considered for set-off against central sales tax liability. A mere excess claim in the return form does not defeat the statutory entitlement to the credit actually found admissible. Interest is chargeable only on the tax amount that remains due after giving effect to the admissible input tax credit and other permitted adjustments.

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Issues: Whether a dealer is entitled to adjust admissible input tax credit against its output tax liability in the current year and, after such adjustment, whether interest is payable only on the remaining tax due.

Analysis: The statutory scheme under sections 11, 12 and 13 of the Gujarat Value Added Tax Act and rules 15 and 18 of the Gujarat Value Added Tax Rules, 2006 permits determination of admissible input tax credit on assessment, adjustment of that credit against the dealer's output tax liability for the current tax period, and then adjustment against central sales tax liability if any balance remains. Mere excess claim in the return form does not by itself defeat the dealer's entitlement to adjust the credit actually found admissible on assessment. Interest becomes payable only on the amount that remains due after giving effect to the admissible input tax credit.

Conclusion: The dealer is entitled to adjust admissible input tax credit against current-year output tax liability, and interest is chargeable only on the balance remaining after such adjustment.

Ratio Decidendi: Admissible input tax credit, once determined on assessment, must be set off against the dealer's current-period tax liability in accordance with the VAT scheme, and excess claim at the return stage does not forfeit that statutory adjustment.

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