C.No.3(36)STP/99(Pt.II), Dated 28th December, 2001.

I am directed to refer to your letter C.No.IVA-ST(12)EST/04/2001/ 3457, dated 1st December, 2001, on the subject cited above and to say that the various issues and difficulties concerning section 73 of the Sales Tax Act, 1990 are under consideration of the Board and appropriate action will be taken in due course. 2. However, the Board is pleased to clarify that if a banking instrument has been issued within 120 days but encashed later, input tax should not be denied. Section 73 refers to "transfer of the payment in favour of the seller from the business account of the buyer". The section does not require deposit of the tax in the account of the supplier within 120 days. Thus, if a bank draft or a pay order is issued within 120 days from the business…