Delhi vat has struck it again !!!!!

DVat 3295 views 4 replies

CA Rahul Jain

1162 Points Joined December 2007

It has now become habitual on the part of businessman doing business in Delhi to adjust to numerous changes in Delhi VAT Act and Rules every year. More than 20 amendments have been effected during this year.

BUT this time the changes have hit it really hard on the people doing business in Delhi.

Recently, vide Delhi Value Added Tax (Third Amendment) Act, 2012, the Delhi government has introduced a rather new but illogical amendments in Section 9 which deals with ‘Tax Credit’.

This provision disallows the proportionate tax credit on the goods which are sold outside Delhi against C Form. For Ex. If a dealer doing business in Delhi have purchased some goods @ 5% VAT and sold this goods outside Delhi @ 2% CST against C Form, then he is not entitled to claim the entire input credit. Rather input credit will be reduced by the prescribed percentage as per Rules 7.

Apart from the monetary loss people have to suffer, it will increase the litigation which in turn will increase the undue harassment by the department. For instance, if a dealer, A, purchases goods both from Delhi and outside Delhi and he sales goods both in Delhi and outside Delhi.

Then how the department would relate as to which sale is against which purchase. Here, the department will make some arbitrary calculation which will, for obvious reason, detrimental to the interest of the dealer.

A clarification as to application of the aforesaid provisions, maintenance of records, submission of report etc is solicited from the department.

Other major amendments:
> VAT returns can be now be revised within one year from the end of financial year of return.
> Levy of penalty on transporters carrying goods without proper or genuine documents increased to 40% of the value of goods
> Online submission of DVAT 51
> Dealers to apply online and obtain the required statutory forms from the department.

Blog: https://rahuljainca.blogspot.in/

Replies (4)

Nitil Kr. Agarwala

Persuing CS

264 Points Joined August 2010

I can’t understand what the finance department is trying to prove. Have they forgotten the motive behind implementing VAT? VAT was implemented to end multi point taxation. Also it was decided while drafting VAT Act that the CST which is being paid by the consumer will be abolished on part basis and at the end it will become NIL. But Till date CST had been lowered to 2% against the Form C. Now these sorts of amendment are really sucking us.

Also we can say the imposing of RITC (Reverse Input Tax Credit) on stock transfer is a very good example for the same and currently the latest amendment in Delhi VAT Act.

I think it resemble me to the stories which we used to listen about the cruel kings who try to impose all sort of taxes and liabilities to their public which were spend on their luxury.

Also one strong question arising in my mind that if GST is imposed then where the public will go if such sorts of amendments are made through the time.

Regards,

Nitil Kumar Agrawala.

CA Rahul Jain

1162 Points Joined December 2007

Filing of DVAT Return – Last Date Extended

Vide Notification dated 25-04-2012, Delhi VAT department has scrapped the filing of half-yearly and yearly filing of returns.

With effect from 01-04-2012, all the dealers registered with the Delhi Vat department are required to file either monthly or quarterly return. Due date for filing the return of the period ending June’2012 was 28/07/2012.

However, considering the enhanced load on tax professionals, due date for DVAT return for the Quarter ending June’2012 has been extended vide circular dated 29-06-2012 as follows:

Dealers Category

(Quarterly Returns)

Last date for online filing

Last date for submission of hard copy

TIN Ending with 1,3,5,7,9

04/08/2012

07/08/2012

TIN Ending with 2,4,6,8,0

11/08/2012

14/08/2012

Extension of due date for filing of DVAT/CST return is a sigh of relief for tax professionals considering that the July month is always a pressure month because of last date of income tax return filing for individuals i.e. 31/07/2012.

sachin chhabra

Internal Auditor

71 Points Joined June 2011

Mr. Jain i could not understand what did you say..you mean we are registered in delhi and also purchases goods from the same state i.e. Delhi but selling goods to U.P. then in this case we cant take credit of our input tax..why is it ammended, the purpose of VAT gets failed by this ammendment ??

as far i have studied till now we cant take credit on purchses which are outside the state like dealer registerd in delhi and purchsing goods from U.P. then in that case he is not allowed to take input credit irrespective of sales whether it is in the same state or outside..but did not know the rule yet, what you have told to us???