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Payment of DVAT

SUNIL GARG (CHARTERED ACCOUNTANT) (175 Points)

19 April 2010

Dear Friends,

My client has Sales Tax No. since 1989. his turnover during 2009-10 was less than 10 lacs but he charged DVAT on his sales. In this year too, his turnover will be less than 10 lacs. I believe that he should not charge DVAT since his turnover is less than 10 lacs.

Please inform me whether I am right or wrong.

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4 Replies

subramanya (Professional) (907 Points)
Replied 19 April 2010

Originally posted by : CA. SUNIL GARG
	Dear Friends, My client has Sales Tax No. since 1989. his turnover during 2009-10 was less than 10 lacs but he charged DVAT on his sales. In this year too, his turnover will be less than 10 lacs. I believe that he should not charge DVAT since his turnover is less than 10 lacs. Please inform me whether I am right or wrong.

Dear Sunil,

In Delhi ‘Taxable Quantum’ or threshold limit prescribed for making a dealer liable to pay tax & for registration is Rs. 10 Lakhs. Even though the turnover is below 10 Lakhs, a dealer can register his firm under Volunatry Registration.

Please check whether your client has registered his firm as a VAT Regular Dealer or Composition Dealer.

If the dealer registers as a Regular Dealer, he can collect VAT on Sales and avail Input tax credit benefit.

If the dealer registers as a Composition Dealer, he has to Purchase goods only from Registered Dealers, He can't collect VAT on his Sales and avail input tax credit.

With regards,

Subramanya

SUNIL GARG (CHARTERED ACCOUNTANT) (175 Points)
Replied 19 April 2010

Dear Subramanya,

My client is a regular dealar. He has not opted for composition scheme.

What I am saying is that according to me he need not to charge DVAT since his t/o is less than 10 lacs.

Am I right or wrong?

subramanya (Professional) (907 Points)
Replied 20 April 2010

Originally posted by : SUNIL GARG
	Dear Subramanya, My client is a regular dealar. He has not opted for composition scheme. What I am saying is that according to me he need not to charge DVAT since his t/o is less than 10 lacs. Am I right or wrong?

Dear Mr.Sunil,

If your client is registered under Regular VAT scheme [+Voluntary Registration], he can collect VAT and claim Input tax credit even though the turnover is less than the taxable quantum.

Assume i have recently opened a business and registered as a Regular dealer under Voluntary registration [also assume my expected turnover will be Rs. 5 Lac], as i have registered as a Regular VAT dealer, i can collect VAT on the goods sold and avail Input tax for the goods purchased.

Subramanya

Nasim (Service) (21 Points)
Replied 15 May 2010

Dear Friends,

Please letus know the procedure for regestration in Composition scheme under DVAT my client is a shopkeepers, can he take input of tax credit on purchase form registered dealers after registered in DVAT.

Nasim Uddin