Section 43B actual-payment requirement prevents deduction of unutilised MODVAT credit and sales tax recoverable balances.
Section 43B permits deduction only for sums payable as tax, duty, cess or fee that are actually paid in the relevant previous year (or paid before the return due date where a statutory liability existed). Unutilised MODVAT credit is an entitlement to adjust future excise liabilities and not an actual payment; sales tax in a recoverable account is a cost adjustment, not discharge of statutory liability. Because no excise liability existed at the relevant year end, the proviso does not apply and such credits do not meet the Section 43B payment requirement for deduction.