Where adjustment of tax arises under clause (e) of sub-section (1) of section 8 by reason of the whole or part of the price owed by the buyer for the purchase of goods having been written off by the dealer as bad debt, the dealer shall make such adjustment to the extent of the tax on the price written off as bad debt provided such price has been written off in his books of accounts and the price so written off has also been claimed by the dealer as deduction under section 36 of the Income Tax Act, 1961 (43 of 1961):
PROVIDED that where the price so written off relates to the sale of goods taxable at different rates of tax specified under section 4, the adjustment shall be made by allocating the price so written off to various amounts outstanding in the following order:-
(i) any interest amount due and outstanding;
(ii) sale price of any exempt goods;
(iii) sale price of goods taxable at the rate of 1 percent;
(iv) sale price of goods taxable at the rate of 3[5 percent];
(v) sale price of goods taxable at the rate of 12.5 percent; and
(vi) sale price of goods taxable at the rate of 20 percent
PROVIDED FURTHER that where the price so written off is recovered subsequently either in whole or part, it shall be deemed to be the sale of goods by him in the tax period in which such price is recovered and the dealer shall make an adjustment in calculating the tax payable for the same tax period by allocating the recovered amount to the amounts stated above in the reverse order.
