As per imachal VAT Act :-
Input tax credit
(1) The input tax credit which a registered dealer is entitled to claim, shall be the amount of tax paid or payable by such registered dealer (hereinafter in this section called purchasing dealer), to the selling registered dealer, on the turnover of purchases made by the purchasing dealer during the tax period. Input tax credit shall be allowed subject to such conditions as may be prescribed and shall be calculated in the manner as provided in this section.
(2) The dealer availing of the input tax credit shall maintain the register and the books of accounts in the manner as may be prescribed.
(3) The input tax credit shall be allowed to the extent of the amount of tax paid by the purchasing dealer on his purchase of taxable goods made in the State, from a registered dealer holding a valid certificate of registration, which are intended for the purposes of,-
(a) sale or re‑sale of goods by him in the State; or
(b) sale in the course of inter‑State trade or commerce; or
(c) sale in the course of export out of the territory of India; or
(d) use as raw material or as capital goods in the manufacturing or processing of taxable goods for sale of the nature referred to in clause (a), (b) or (c); or
(e) use as containers or packing material of taxable goods for sale of the nature referred to in clause (a), (b) or (c) and (d):
PROVIDED that if the goods so purchased are used partially for the purposes specified in this sub‑section, the input tax credit shall be allowed proportionate to the extent they are used for the purposes specified in this sub‑section:
PROVIDED FURTHER that input tax credit on fuels and lubricants, shall be allowed only to the extent by which the amount of tax paid in the State exceeds 4 percent subject to the condition that such fuels and lubricants are used in the production of taxable goods or captive generation of power.
(4) Notwithstanding anything contained in sub‑section (3), the input tax credit shall be allowed only to the extent by which the amount of tax paid in the State exceeds 4 percent on purchase of goods-
(a) sent outside the State otherwise than by way of sale in the course of inter‑State trade or commerce or in the course of export out of territory of India; and
(b) used in manufacture or in packing of taxable goods sent outside the Siate otherwise by way of sale in the course of inter‑State trade or commerce or in the course of export out of territory of India.
(5) The input tax credit shall not be claimed by the dealer until the tax period in which he receives from a registered dealer from whom he has purchased the goods, a tax invoice in the prescribed form (in original) evidencing the payment of amount of input tax:
PROVIDED that for good and sufficient reasons, to be recorded in writing and in the prescribed manner, the Commissioner or any person appointed under section 3 may allow such credit subject to such conditions and restrictions as may be prescribed.
(6) The input tax credit on capital goods shall be limited to plant and machinery directly connected with the manufacturing or processing of the finished products and input tax credit as admissible under this section shall commence from the date of commencement of commercial production and shall be adjusted against tax payable on turnover of sales over a period of three years:
PROVIDED that in case of closure of business before the period of three years, no further input tax credit shall be allowed and input tax carried forward, if any, shall be forfeited.
(7) No input tax credit shall be claimed by a registered dealer and shall not be allowed to him for,-
(a) tax collected on the purchase of goods used in the manufacture or . processing or packing of goods declared tax free under section 9;
(b) purchases of goods made in the course of inter‑State trade and commerce or in the course of import from outside the country or from outside the in respect of tax paid in any other country or other State;
(c) purchase of goods made in the State from,-
(i) an un‑registered dealer or a casual dealer, or
(ii) a dealer whose certificate of registration has been suspended, or
(iii) a registered dealer who has opted to pay lump‑sum amount, in lieu of tax, by way of composition under section 16 or presumptive tax under section 7;
(d) purchase of goods used as free samples or gift or for personal consumption;
(e) goods purchased for the uses specified in sub‑section (3) but not sold because of theft, loss or destruction for any reason including natural calamity;
(f) purchase of capital goods other than those specified in sub‑section (6); stock of goods remaining unsold at the time of closure of business and if a dealer has already taken any input tax credit against purchase of such stock of goods there shall be a reverse tax credit on closure of such business;
(h) except as provided in sub‑section (4), tax collected on purchase of goods but subsequently dispatched to a place outside the State in any manner otherwise than by way of sale in the course of inter‑State trade or commerce;
(i) except as provided in sub‑section (4), tax collected on the purchase of goods used as raw material in the manufacture of goods, and the goods so manufactured are dispatched outside the State in any manner otherwise than by way of sale in the course of inter‑State trade or commerce;
(j) purchase of goods for sale under the transfer of right to use goods for any purpose (whether for specified period or not);
(k) purchases where,-
(i) tax invoice is not available with the registered dealer; or
(ii) there is evidence that the tax invoice has not been issued by the selling dealer from whom the goods have been or stated to have been purchased; or
(iii) original tax invoice does not contain the details of tax charged separately by the selling dealer from whom purchasing dealer has purchased the goods.
(8) Notwithstanding anything contained in this Act, the State Government may, as may be prescribed, specify any goods in respect of which input tax credit shall not be allowed in part or in full or specify the class of dealers who shall not be entitled to input tax credit in part or in full.
(9) If the goods purchased are intended for the purposes specified in sub‑section (3) and are subsequently used fully or partly for purposes other than those specified in the said sub‑section, the input tax credit, if availed of, shall be reduced from the tax credit being claimed for the tax period during which such use has taken place; and such reduction, shall be done in the manner as may be prescribed.
(10) Subject to the provisions of this section, input tax credit already availed of shall stand reversed if,-
(a) the dealer discontinues business; or
(b) the certificate of registration granted to the dealer is cancelled; or
(c) the goods fall under clause (d) or (e) or (g) of sub‑section (7); or
(d) excess input tax credit has been claimed; or
(e) the goods purchased are returned to the selling dealer within three months of the date of purchase of such goods; or
(f) the credit note has been received from selling registered dealer for the amount of tax charged in excess of the tax due according to the provisions of this Act; or
(g) there exist any other circumstances as may be prescribed.
(11) The dealer shall be liable to pay such amount of reverse input‑tax credit alongwith interest under section 19 from the date immediately succeeding the last date prescribed for filing of return for such period for which such input‑tax credit was claimed till the date of its payment.
(12) Where any purchasing registered dealer has been issued with a credit note or debit note or if he returns or rejects goods purchased, as a consequence of which the input tax credit availed of by him during any tax period (to which the purchase of goods relates) becomes either short or excess, he shall compensate such short or excess by adjusting the amount of input tax credit allowed to him in respect of the tax period in which the credit note or debit note has been issued or the goods are returned or rejected, subject to such conditions as may be prescribed.
(13) The amount of net input tax credit, which may be availed of by a registered dealer, shall be determined on the basis of the following formula, namely:
Net Input Tax Credit = A+B‑C
Explanation: In this formula-
(i) "A" represents the amount of input tax credit for which the dealer is entitled to;
(ii) "B" represents outstanding input tax credit brought forward from the previous tax period; and
(iii) "C" represents reverse input tax credit as determined under sub‑section (10).
(14) The methods that are used by a registered dealer in a year to determine the extent to which the goods are sold, used, consumed or supplied, or intended to be sold, used, consumed or supplied in the course of making taxable sales shall be fair and reasonable:
PROVIDED that the Commissioner or any person appointed under section 3 may, after giving the dealer an opportunity of being heard and for the reasons to be recorded in writing, reject the method adopted by the dealer and calculate the amount of tax credit.
(15) Where a registered dealer without entering into a transaction of sale, issues to another registered dealer a tax invoice, retail invoice, bill or cash memorandum with the intention to defraud the State Government revenue or with the intention that the State Government may be defrauded of its revenue, the Commissioner or any person appointed under section 3 may, after making such inquiry as he thinks fit and giving a reasonable opportunity of being heard, deny the benefit of input tax credit to such registered dealer issuing or accepting such tax invoice, retail invoice, bill or cash memorandum on other invoice either prospectively or retrospectively from such date as he may, fix.
So Kindly see that the purchase of Oil & lubricant is for which purpose. Is it for re-sale or for used in manufacturing.
Thafollowing link may help you:-
Nitil Kr. Agrawala