Delhi Value Added Tax Act, 2005 has been amended by Delhi Value Added Tax (2nd Amendment) Act, 2015. Now, Government of Delhi got powers to increase VAT upto 30% on petrol, liquor, aerated drinks etc.Following are the changes in DVAT Act effective from July 15, 2015:
Rates of Tax
Certain petroleum products, liquor, tabacco, gutkha, aerated drinks and some other items are mentioned in fourth Schedule of DVAT Act. Items mentioned in fourth Schedule are taxable at flat rate of 20%. Now VAT rate on such items can be increased to 30% as an upper cap of 30% has been prescribed for such items.
Post Sale Discounts
Earlier discounts or incentives offered by seller after issuance of invoice (through credit notes) was adjusted in output tax liability. As per the amended provision now such post sale discounts cannot be adjusted in output tax liability. Similarly, the purchaser need not reduce its input tax credit arising on account of such post sale discount. Further, seller-dealer is also debarred from issuing credit note to purchaser for such post-sale discounts.
Cancellation of Registration
Now dealers need not surrender their registration certificate while applying for cancellation of registration. Similarly, dealers whose registration are otherwise cancelled need not surrender their registration certificate. Further amendment also does away with requirement of levying penalty on dealers who failed to surrender their registration certificate. Provision which constitutes non-surrendering of registration certificate as an offence has also been omitted.
Earlier commissioner could demand security within 15 days from the date on which return was filed or refund claim was made. Now this time-limit has been enhanced to 45 days.
Now penalties for certain defaults has been reduced, which is prescribed hereunder:
(1) Section 86(5) – for failure to file information under Section 21(1) for amendment in registration
Old Penalty – Rs. 500 per day subject to maximum penalty of Rs. 10,000New Penalty – Rs. 200 per day subject to maximum penalty of Rs. 10,000
(2) Section 86(6) – Failure to apply cancellation of registration due to closure of business under Section 22(2)
Old Penalty – Rs. 1,000 per day subject to maximum penalty of Rs. 25,000New Penalty – Rs. 200 per day subject to maximum penalty of Rs. 25,000
(3) Section 86(6) – for failure to surrender certificate of registration under Section 22(7)
Old Penalty - Rs. 1,000 per day subject to maximum penalty of Rs. 25,000New Penalty – No penalty as this provision is now omitted
(4) Section 86(9) – for failure to file of returns and documents, etc.
Old Penalty – Rs. 500 per day subject to maximum of Rs. 50,000New Penalty – Rs. 200 per day subject to maximum penalty of Rs. 50,000
(5) Section 86(16) – for failure to issue tax invoice under Section 50
Old Penalty – No PenaltyNew Penalty – Higher of Rs. 5000 or 20% of tax deficiency