The proportion of input tax not deductible from output tax in the current period or in the current year depicted in this Act (called the "non-deductible ratio") shall mean the net sales amount of tax-exempt sales plus the net sales amount subject to Section 2, Chapter IV of the Act as a percentage of the total net sales amount for each period. However, the sales amount of land, government bonds as well as securities subject to transaction tax shall be excluded from the aforementioned calculation. 
The net sales amount referred to in the preceding paragraph shall mean the balance of the total sales amount minus returns and discounts.