Delhi Government introduced the Delhi Value Added Tax (Third Amendment) Bill 2015 in the Delhi Legislative Assembly on 4th December 2015 and passed it on the same day.
1. SHORT TITLE, EXTENT AND COMMENCEMENT.
(i) This Act may be called the Delhi Value Added Tax (Third Amendment) Act, 2015.
(ii) It extends to the whole of the National Capital Territory of Delhi.
(iii) It shall come into force on such date as the Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act.
Self Explanatory
2. AMENDMENT OF SECTION 3.
In the Delhi Value Added Tax Act, 2004 (hereinafter referred to as the principal Act), in section 3, after sub-section (10), the following sub-section shall be inserted, namely:-
“(11) Notwithstanding anything contained in this Act to the contrary, the Government may by notification specify the goods on which a person shall pay tax in advance at the rates notified by the Government but not exceeding the rates applicable on such goods under this Act, when he imports such goods into the National Capital Territory of Delhi from a place outside India, subject to such conditions as may be specified in the notification. The aforesaid payment of tax in advance shall be counted towards the final tax liability of the taxable person:
Provided that the Government may by notification exempt any person or class of persons from payment of tax in advance or reduce the rate of payment of tax in advance subject to such conditions as may be notified:
Provided further that if on an application made by a person the Commissioner or an officer authorized by him, after verifying all aspects of the case, arrives at a decision that such person should be exempted from payment of tax in advance or that the rate of payment of tax in advance should be reduce for such person, he may do so and impose such terms and conditions on such person as he may deem fit.
Explanation.- The person, who imports goods into the National Capital Territory of Delhi, shall pay tax in advance, on the presumption that such goods are meant for the purpose of sale or for use in manufacture or processing of goods meant for sale, unless, it is proved otherwise by such person. It is further presumed, unless it is proved otherwise by such person, that such goods or any product manufactured therefrom shall not be sold below the price at which such goods have been purchased and imported.”
Proposed amendment introduced the provision of advance payment of tax by dealer importing goods into Delhi from a place outside India. With this provision govt is empowered to require the importing dealers to pay advance tax at the applicable rate of DVAT on goods imported. Credit of such advance tax shall be available against final liability of dealer.
Two proviso are also inserted to make provisions for exemption from payment of advance tax and for payment of advance tax at lower rate.
It shall also be presumed that (1) Any goods imported into Delhi shall be for Resale or for use in manufacturing of goods meant for sale and (2) Imported goods shall not be sold below purchase price. Onus shall be on dealer to defy these assumptions.
3. AMENDMENT OF SECTION 29.
In the principal Act, in section 29, after sub-section (1), and before the Explanation 1 clause, the following sub-section shall be inserted, namely:-
“(2) The Commissioner may by notification in the official gazette, require any dealer or class of dealers to file the returns only through electronic mode appending digital signatures or any other electronic identification process and with effect from such date as may be specified therein.”
After the insertion of this sub section commissioner is empowered to make it mandatory for certain class of dealers to authenticate their online return with digital signatures or other electronic identification process. Such dealers would not be able to authenticate their return by submitting DVAT 56 physically in the department. This provision would increase the automation. It will also help in promotion of Digital India Campaign and reduce the use of paper.
4. INSERTION OF NEW SECTION.
In the principal Act, after section 50, the following new section shall be inserted, namely:-
“50A electronic communication of sale information.-
(1) The Government may by notification in the official gazette require any dealer or class of dealers to install such physical compliance devices or software, as may be considered necessary for instantaneous communication of the information of sale invoices to the Commissioner.
(2) The cost of equipment and installation of the device and software, as may be required under sub-section (1), shall be borne by the dealer.”
Insertion of new section 50A aim at capturing the data of sales made by dealers in real time through electronic communication thereby minimizing the chances of manipulation of any sale data afterwards and evasion of tax thereof.
This provision too will promote Digital India Campaign and also prevent the tax evasion. However it would require the 24 availability of department servers without any disturbance and hassle. Also there would be high cost of equipments and installation hence it is advisable to prescribe these provisions, at the initial stage, for big dealers only.
5. AMENDMENT OF SECTION 89.
In the principal Act, in section 89,-
(i) in sub-section (1), the concluding words “ with a fine”, shall be substituted with the words “ with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved”;
(ii) in sub-section (2), the concluding words “ with a fine”, shall be substituted with the words “ with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved”;
(iii) for sub-section (3), the following sub-section shall be substituted namely:-
“(3) Whoever, willfully attempts, in any manner whatsoever, to evade payment of tax, penalty or interest or all of them under this Act, shall, on conviction, be punished-
(a) in any case where the amount involved exceeds one crore rupees during the period of a year, with rigorous imprisonment for a term which may extend from a minimum period of six months to two years, and with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved ;
(c) in any other case, with rigorous imprisonment for a term which may extend to three months and with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved. ”;
(iv) in sub-section (4), the concluding words “ with a fine”, shall be substituted with the words “ with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved”;
(v) in sub-section (5), the concluding words “ with a fine”, shall be substituted with the words “ with a fine of not less than the amount equal to tax deficiency involved or fifty thousand rupees, whichever is higher but not exceeding four times of the amount of tax deficiency involved”; and
(vi) in sub-section (6), the words “ one hundred rupees”, shall be substituted with the words “ five hundred rupees”.
The proposed amendments in section 89 is to make the provisions more deterrent by increasing the punishment for potential offenders including increase of the amount of minimum fine which can be imposed under the provisions of the Delhi Value Added Tax Act, 2004. Now the minimum fine shall be, higher of tax deficiency involved or fifty thousand rupees, subjected to maximum of four times of tax deficiency involved. Fine for continuing default has also been increased from 100/Day to 500/Day. Similarly term of imprisonment has also been extended.
6. INSERTION OF NEW SECTION.
In the principal Act, after section 91, the following new section shall be inserted, namely:-
“91A Special Courts and Public Prosecutor -(1) Notwithstanding anything contained in this Act to the contrary, the Government may, if considers expedient or necessary, constitute, by notification in the Official Gazette, a Special Court with the concurrence of the Chief Justice of the Delhi High Court for the purposes of the trial of offences under this Act.
(2) For the Special Court, the Government shall appoint a person to be the Public Prosecutor and may appoint more than one person to be the Additional Public Prosecutors.”
The proposal for insertion of new section 91A is to make enabling provisions for setting up of Special Courts for speedy trials of the offences. Govt would be able to setup special courts in consultation with Chief Justice of Honourable HC of Delhi. Furthered govt would also be able to appoint Public prosecutor and additional public prosecutors.
7. AMENDMENT OF SECTION 92.
In the principal Act, in section 92,-
(i) in sub-section (2), after the concluding words “a cognizable offence”, the words “and all provisions of the Code of Criminal Procedure, 1973, shall be applicable mutatis-mutandis” shall be inserted; and
(ii) after sub-section (2), the following sub-sections shall be inserted, namely:-
“(3) If in a series of acts, so connected, as to form same transaction, any cognizable offence under the Indian Penal Code, 1860 appears to have been committed in addition to offence under this Act, the officers so authorized shall be competent to investigate such cognizable offence under the Indian Penal Code, 1860.
(4) Every officer or person so authorized shall, upon investigation of the offence, submit a report to the Commissioner with the recommendations for sanctioning prosecution or otherwise and the Commissioner, shall, then take a decision as to whether prosecution is essentially required in the matter and if so, the authorized officer shall launch prosecution before the Metropolitan Magistrate having jurisdiction over the area or before a court specially designated by the government for the purpose.
The proposed amendment of section 92 aims to empower investigation under the Indian Penal Code, 1860 where commission of an offence under the Delhi Value Added Tax Act, 2004, involves commission of an offence punishable under the Indian Penal Code, 1860 and to incorporate the process to be opted by an authorized officer for prosecution after investigation of an offence. With the introduction of these provisions department would be able to investigate and prosecute any offence punishable under IPC 1860 while investigating and prosecuting any offence punishable under DVAT Act 2004.
8. AMENDMENT OF SECTION 93.
In the principal Act, in section 93, in sub- section (1) the following proviso shall be inserted, namely:-
“Provided that the composition of offence shall not apply in case of second and subsequent offence of the same nature”
Section 93 empowers the commissioner to compound any offence punishable under Delhi Value Added Tax Act 2004. However there was no safeguard in the act against the misuse of this provision by the habitual offenders. Now, after the insertion of above proviso, benefit u/s 93 shall not be available to compound an offence of same nature committed for 2nd or subsequent time.
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