DELHI VAT AMENDMENTS DURING 2012-13 HIGHLIGHTS

(by Rakesh Garg)

1.

Delhi Value Added Tax (Amendment) Act, 2013; Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/ Fin.(Rev.-1)/ 2012-13/dsvi/263 dated 30.3.2013
(i) Increase in taxable quantum from Rs. 10 lacs to Rs. 20 lacs. Thus, a dealer is not required to get registration under the DVAT Act until his local turnover in a financial year exceeds Rs. 20 lacs. Net tax shall be paid by all the dealers, irrespective of their tax liability and tax period, within 21 days of the conclusion of each month. For the purpose of imposition of DVAT on sale on imported goods from other countries, sale price of these goods shall be greater of : (i) the valuable consideration receivable by the dealer on such sale, and (ii) Customs valuation at the time of import. To illustrate, a dealer imports 1000 mobile phones from China; the invoice value is Rs. 2,000/- per phone, and customs duty is paid on value @ Rs.4,000/- per phone. If these phones are sold in India @ Rs. 5,000/- per phone, then DVAT would be paid on the valuable consideration, i.e., Rs. 5,000/-; however, if phones are sold @ Rs. 3,900/- per phone, then DVAT would be payable at Rs. 4,000/- per phone, being the customs valuation. (iv) Leasing companies shall be eligible for input tax credit on purchase of goods used for the purpose of leasing (transfer of right to use goods) in four equal annual proportions. Therefore, if a dealer purchases goods in the quarter of June 2013 for the purpose of taxable transfer of right to use goods, then he shall claim one-fourth of the input tax credit in that tax period; and remaining three-fourth in three equal proportions in the quarters of June 2014, June 2015 and June 2016. Where the deductee-contractor/sub-contractor is not registered under the Delhi VAT Act, rate of TDS on works contract has been increased from 4% to 6%. A proviso has been inserted in Section 16(1) with effect from 01.04.2013, that in case the Government has notified a composition scheme for a class of dealers under section 16(12), such dealers shall not have an option to pay tax under section 16(1). With the insertion of said proviso, works contractors and dealers engaged in trading of bullion, drugs and medicines could not opt for the general composition scheme u/s 16(1) (of 1%) with effect from 01.04.2013 since a separate composition scheme has been notified for them u/s 16(12). With this amendment, petty works contractors, whose turnover is up to Rs. 50 lacs, and paying tax under the Composition Scheme u/s 16(1), would be adversely (1)

(ii) (iii)

(v) (vi)

DVAT Amendments in 2012-13 - Highlights affected. To illustrate, a civil contractor, whose turnover is, say, Rs. 40 lacs, was paying composition tax u/s 16(1) @1% up to the year 2012-13. With the insertion of this proviso, he cant opt for the composition scheme u/s 16(1) of 1% for 2013-14, and might have to go for new composition scheme of 3%. (vii) The Commissioner shall, at intervals not exceeding three months, host on the departmental website (instead of publishing in official gazette), particulars of registered dealers whose registration has been cancelled. (viii) If, any dealer fails to submit audit report as per section 49 of the Act, he shall be liable to pay, by way of penalty, a sum equal to 1% of his turnover or a sum of Rs. 1 lac, whichever is less (increased from Rs.10,000/-). [also refer Para No. 5 below] (ix) If the dealer voluntarily admits its tax liability at the time of field inspection/ survey and deposits the tax due under the Act-Reduction of penalty up to 80%.

2.
(i) (ii) (iii)

Delhi Value Added Tax (Amendment) Rules, 2013; Notification No. F.3(15)/Fin.(Rev-I)/2012-13/dsvi/264 dated 30.03.2013
Uniform tax period, for all dealers irrespective of their turnover, which will be a quarter. Thus every dealer shall file return on quarterly basis. Concept of optional tax period has been withdrawn and Form DVAT-55 is omitted; By amending Rule 7(1), ambiguity in relation of reversal of input tax credit on interState sale has been removed. At present, reversal of input tax credit is not required at the time of making inter-State sale. Requirement to maintain new records in Form DVAT-30A and DVAT-31A - Entry wise details of debit/credit notes relating to purchases and sales. It has been clarified that books of accounts, as stated in rule 42, shall be maintained separately in relation to the business carried out in Delhi. If a dealer sells any goods exceeding Rs. 100/- (increased from Rs. 25/-) in any one transaction to any person, he shall issue a retail invoice.

(iv) (v) (vi)

(vii) Procedure for issuance of TDS certificate has been amended. Further, TDS certificate shall be issued by the deductor within 7 days of deposit of tax in the Bank (Tax shall be deposited within 15 days from end of the month in which tax was deducted). Thus, if the TDS, deducted during the month of April 2013, has been deposited by the contractee on 10.5.2013, he shall issue certificate up to 17.5.2013; and if TDS has been deposited on 15.5.2013, certificate shall be issued up to 22.5.2013. (viii) Substitution of Return Form in DVAT-16: Modification in the Form and insertion of two Annexures therein: Annexure 2C and 2D in relation to entry-wise details of debit/credit notes relating to purchases and sales. (ix) (x) Substitution of Return Form in DVAT-17: Modification in the Form and insertion of Annexure 2A and 2B relating to summary of purchases and sales. Amendment in form DVAT-23 in relation to claim of refund by the Embassies, International and Public Organizations; and Amendment in Form DVAT-52 to furnish details of PAN and IEC (Importer Exporter Code).

(2)

DVAT Amendments in 2012-13 - Highlights

3.

Online details of inward movement of goods in Delhi Form T-2 Notification No. F.7(433)/Policy-II/VAT/2012/1429-38 dated 21.3.2013 read with No. F.7(433)/Policy-II/VAT/2012/1464-64 dated 30.3.2013
Dealers having GTO Rs.10 Crores (except the dealers exclusively dealing in tax free goods) shall submit online details of invoice and goods receipt note in respect of all goods purchased/received as stock transfer from outside Delhi, using their login id and password, in Form T-2 w.e.f. 1.4.2013, before the goods physically enter the boundary of Delhi. However, if the vehicle number is not available in advance, Form T-2 would need to be filed without vehicle number and the vehicle number would need to be updated within 24 hours of receipt of the goods by the Delhi dealer. However, in cases where the complete information in Form T-2 is not filed online before the goods enter Delhi, the Delhi dealer shall not dispose of/sell/dispatch such goods till the vehicle number in Form T-2 is updated online. For FAQs released by Delhi VAT Department recently: Refer Circulars Section (dated 28.03.2013) at www.versatilepublishers.com.

4.

New composition scheme for all types of works contractors Notification No. 3(13)/Fin.(Rev-I)/2012-13/dsvi/180 dated 28.2.2013
A new comprehensive composition scheme has been notified for works contract covering all type of contracts in place of existing composition scheme w.e.f. 1.4.2013. Rate of tax under this scheme varies from 1% to 6% of the entire turnover, depending upon nature of contract and manner of purchases.

5.

Submission of audit report u/s 49 by specified dealers in Form AR-1 Notification No. F.7(420)/Policy/VAT/ 2011/1203-1213 dated 11.2.2013
Dealers are no longer required to furnish annual financial statements and audit report u/s 44AB of the Income Tax Act, 1961. If the gross turnover of a dealer exceeds Rs. one crore, the powers have been given to the Commissioner to notify the form, manner and time for furnishing of audit report by the dealer. He may specify a simplified version of report for any dealer or a class of dealers, or may even exempt any dealer or class of dealers from furnishing of said audit report. In exercise of his powers, the Commissioner has notified that dealers, whose turnover has exceeded Rs. 10 crores during 2011-12 or any subsequent year (except 100% exporters and exclusive dealers in exempted goods), shall furnish audit report for 201213 and subsequent years in Form AR-1 up to 15th November of the following year. [No report has yet been prescribed for dealers having turnover up to Rs.10 crores.]

6.
(i)

Notification No. F.14(13)/LA-2012/cons2law/179 dated 28.12.2012 read with No.F.3(9)/Fin.(Rev.-1)/2012-13/dsvi/34-39 dated 15.01.2013
For the purpose of imposition of DVAT on the sale of petrol and diesel by the Oil Companies, sale price thereof shall be equivalent to its M.R.P., which the consumers pay to the retail outlets (filling station). To illustrate, M.R.P. of petrol on a particular

(3)

DVAT Amendments in 2012-13 - Highlights date is Rs. 70/- per lt., whereas Oil Company charges Rs.65/- from filling station; in such a case, Oil Company will pay DVAT on Rs.70/- per lt. instead of at Rs.65/(ii) (iii) (iv) (v) Where the deductee-contractor/sub-contractor is registered in DVAT Act, rate of TDS has been increased from 2% to 4%. Fees, remuneration and incidental expenses for special audit u/s 58A of the Act shall be paid by the DVAT Department (instead of by the dealer). Dealer shall furnish the details of IEC (Importer Exporter Code) in the prescribed form. Intimation of PAN issued under the Income Tax Act, 1961 is mandatory for registration under the DVAT Act.

7.

Submission of online details of stock as on 31st March every year Notification No.F.7/433/Policy-II/VAT/2012/472-483 dated 16.08.2012
Dealers are required to submit tax-rate wise details of closing stock as on 31st March every year online, using their login id and password up to the 30th June of the next financial year in Form Stock-I. Details of stock held on 31.3.2012, was required to be submitted up to 30.10.2012. (Later extended up to 30.11.2012).

8.

Submission of online details regarding central declaration forms in Form CD-1 Notification No. F.7(450)/Policy/VAT/2012/336-347 dated 12.07.2012
Dealers are required to submit details relating to central declaration forms received against the stock transfer or central sales made on concessional rates, central declaration forms missing and tax deposited on account of missing forms quarter wise, online using his login id and password, for all quarters beginning 1.4.2011 onwards in Form CD-1. The last date for filing of information online in Form CD-1 for every quarter shall be the same as the last date for submission of reconciliation return in form DVAT-51 for the quarter.

9.

Submission of online details for movement of specified goods outside Delhi in Form T-1 Notification No. F.7(433)/Policy-II/VAT/ 2012/ 211-222 dated 18.06.2012
In partial modification of earlier notifications, dealers are required to submit online details relating to any movement of petroleum products (except kerosene oil, petrol, diesel, aviation turbine fuel, liquid petroleum gas or compressed natural gas), tobacco and gutka, in pursuance of inter-State sale, stock transfer and export, within 48 hours after the movement of goods begins, in Form T-1.

10.

Various notifications Waiver of furnishing of security at the time of registration

Through various notifications, the Commissioner waived the condition of furnishing of security at the time of registration from 23.07.2012 to 05.04.2013.

(4)

DVAT Amendments in 2012-13 - Highlights

11.

Amendments in the Delhi VAT Rates w.e.f. 01.04.2013

[vide Notification No. 3(18)/Fin(Rev-I)/2012-13/dsvi/265; dated 30.03.2013] S. No. Commodity NEW Rate Rate (%) 1 2 3 Empty Pencil/Geometry Box Sendha Namak All types of footwear having MRP up to Rs. 500/- provided that the MRP is indelibly marked or embossed on the footwear itself Charkhi, Manjha used for flying kites Refuse Derived Fuel (RDF) Tiles made from Malba Kerbstones made from Malba and 0 0 0 Entry No. 31-I 35-I 69-I Old Rate Rate (%) 12.5 5 5/0 Entry No. 81-III 51-III/ 69-I

4 5 6 7 8 9 10 11

0 0 0 0 0 0 5 5

83-I 86-I 87-I 88-I 89-I 90-I 181-III 183-III

12.5 12.5 12.5 12.5 12.5 5 12.5 12.5

81-III

Chilly spray used for self-defence Organic Gulal, Organic Colours Singhara, Kuttu and their Atta Desi Ghee LED lights

[For complete text of the afore-stated Notifications: Refer Notifications Section at www.versatilepublishers.com]

(5)