First of all a very good evening to all the members of CCI Family. Friends it gives me immense satisfaction to introduce the fifth part of my series i.e " VAT/ CST - A Better understanding - Part 5 ".
In the last series we talked about " Payment of tax and filing of return " and in this series we will talk about " Non fulfilement and Input tax credit ". so lets start with it -
Effect of non - fulfilement of return -
If any dealer fails to file return in prescribed time period he shall make himself liable for payment of penalty under sec. 86(9) of DVAT Act 2004. The dept. may resort to sealing his business premises and cancellation of his registration also.
Revised Return -
The dealer can file revised return in the following cases -
(a) If, within 4 years of filing original return the dealer discovers any mistake because of which he has paid less tax to the dept. than due under the Act, he shall within 1 month of discovery of such error, file revised return.
(b) If, within 4 years of filing original return the dealer discovers any mistake because of which he has paid less tax to the dept then he may file objection under sec 74 of DVAT Act.
Tax Adjustment -
The dealer may adjust his tax liability in relation to the sale of goods made by him in the following situations -
(a) Where sale has been cancelled,
(b) Where the nature of sale has been fundamentally varied or altered.
(c) Where the goods in part or in whole returned to the dealer within six months of the date of sale.
Works Contract Under VAT -
Work contract has been defined in dection 2 of the Delhi VAT Act, 2004 and reads as under :
" Work Contract " includes any agreement for carrying out for cash or for deferred payment or for valuable consideration, the buliding construction, manufacture, processing, fabrication, erection, installation, fiting out, improvement of any movable or immovable property ".
Like all normal dealers the dealer of work contract too have to apply for registration under DVAT Act 2004.
Under the work contract the contractee has to deduct TDS at the rate of 4% while making payment to the contractor .
Composition scheme -
Composition dealer are of two categories -
(a) Dealer having t/o upto 50 lakhs,
(b) No limit forr civil contractor.
The act provides composition scheme especially for work contract dealers those who are executing contract relating to civil construction. Under the said scheme, the rate of tax prescribed are 2.5% for dealers who make all the purchases and the sales within delhi only and 3% for dealers if they are engaged in procuring goods from any place outside delhi.
So thats bring us to the end of 5 th part of my precious series.
Thanks & Regards
Sanyam Arora
CAclubindia
