Changes in Delhi VAT

CA.Tarun Maheshwari | Last updated: 18 January 2010

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CHANGES IN D-VAT ACT-2004

1- RATE OF D-VAT INCREASED
w.e.f. 14-1-2010 all items mentioned in schedule-III of D-VAT Act (i.e. items that were sold @ 4% earlier) will be sold @ 5%.

2- LIMITATION ON THE CLAIM OF INPUT TAX CREDIT
w.e.f. 1-1-2010, the following limitations has been imposed / the following points to be kept in mind while claiming Input tax credit.

(i)The Input tax credit shall be allowed to the extent of the goods purchased has been actually sold. (i.e. no tax credit shall be allowed / no refund and carry forward shall be allowed till the goods has been actually sold.)(i.e. no tax credit shall be allowed on stock.)

(ii) While claiming Input Tax Credit, the dealer has to ensure that the vat paid by him to another dealer while purchasing the goods has actually been deposited by the another dealer and has been disclosed in his return.(i.e. now every dealer has to collect the information / copy of return and detail of return form the other dealers from whom you have purchased the goods.)

(iii) If you are selling the goods lesser than the price at which it was purchased, then in the period of sale, the Input tax credit shall be reduced proportionately.(i.e. the tax credit claimed on a particular purchase shall not be more than the amount of tax payable on its sale.)

KINDLY BE CAREFULL NEXT TIME WHILE FILING YOUR D-VAT RETURN.

THE MOST IMPORTANT
Now w. e. f. 1-1-2010, to claim correct INPUT TAX CREDIT, Every dealer will have to maintain its BOOKS OF ACCOUNTS CORRECTLY and through QUALITY accountants.

Other wise your Input Tax Credit may Loose.

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CA.Tarun Maheshwari

CA, DISA

ADelhi based practising CA. I love discussionson professional matters especially on Income tax. Want to get more and more knowledge in every field of our profession.Thanks for visiting my profile. I wish it will convert into a long termboundingon professional as well as personal fronts. I am available at tarun2507 @ ... Read more

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