(1) A taxable person who makes both taxable and exempt supplies may deduct the input tax on the taxable purchases and taxable imports which can be directly attributed only to the taxable supplies made.

(2) Where a taxable person has made both taxable and exempt supplies, but cannot directly attribute input tax to the taxable and exempt supplies under subsection (1), that person may deduct as input tax on the taxable purchases and taxable imports, an amount that bears the same ratio as the taxable supplies bear to the total supplies, applying the apportionment formula specified in the Fifth Schedule.

(3) For purposes of subsections (1) and (2), if the ratio of taxable supplies to total supplies for the tax period is less than five per cent, the taxable person is not entitled to deduct any input tax for the tax period.

(4) For purposes of subsections (1) and (2), if the ratio of taxable supplies to total supplies for the tax period is more than ninety-five per cent[um], the taxable person may deduct the entire input tax allowable on the taxable purchase and taxable imports.

(5) The Commissioner-General may approve or direct alternative methods of apportioning input tax where the Commissioner-General considers that the methods described in this section will result in an unreasonable calculation of the input tax which may be deducted.

(6) Despite any other provision of this section, in the case of a bank or other financial institution making both exempt and taxable supplies for a tax period, the amount of the input tax allowed as deduction for that period is limited to the amount of input tax payable in respect of supplies or imports received which are directly attributable to the making of taxable supplies.