9.       Start up Business:

          1)      A dealer intending to set up a business in taxable goods who does not anticipate making first taxable sale within the next three months and applying for VAT registration shall be treated as a start up business.

          2)      The dealer referred to in sub-rule (1) shall make an application on Form VAT 104 in addition to Form VAT 100 to the authority prescribed.

          3)      The dealer applying for registration as a start-up business under clause (b) of sub-section (6) of Section 17 may apply to be registered only for a period of  twenty four months prior to making taxable sales.          

          4)      The  dealer registered as a start up business under clause (b) of sub-section (6) of Section 17 may claim a tax credit on each tax return for a maximum period of twenty four months prior to making taxable sales. The input tax claimed must be in respect of tax paid on inputs relating to the  prospective taxable business activities. The credit shall be eligible for refund under the provisions of Section 38. The provisions of sub-section (1)(b) of Section 38 shall apply only from the tax period in which the first taxable sale was made.     

          5)      The  dealer registered as a start up business under clause(b) of sub-section (6) of Section 17 shall abide by all the requirements and obligations of a VAT dealer including the proper keeping of books of accounts and regular filing of returns.

          6)      A dealer shall cease to be registered under the provisions of  clause (b) of sub-section (6) of Section 17 and shall become registered under the provisions of sub-section (1) of Section 17, when that dealer makes a taxable sale in the course of business         

          7)      A dealer shall cease to be registered under the provisions clause (b) of sub-section (6) of Section 17  at the end of a twenty four months period from the date of registration if no taxable sale has been made.  In such a case, the registration will be cancelled under the provision of  Rule 12.

          8)      The Deputy Commissioner may at his discretion, where there are reasonable grounds, vary the conditions under sub rules (3), (4), (6) and (7) and may grant a further time upto twelve  months for making the first taxable sale and to continue as start up business.