Archives for category: DVAT

Changes in Delhi Value Added Tax


  • Monthly Tax payment: Tax to be deposited by 21st of each month irrespective of the return period.
  • DVAT Return: No Monthly returns. Only quarterly returns for all dealers irrespective of their turnover. Annexure 2A and 2B to be prepared quarter wise- party wise. Earlier, it was month wise-party wise. New Annexure 2C/2D related to Debit/ Credit notes to filed along with return
  • Form T-2 – DVAT dealers with GTO of 10 Crore and more to file Form T-2 for Central purchases.
  • Tax credit in respect of capital goods –1/3rd of input tax on capital goods is allowed immediately and balance 2/3 in corresponding tax periods, in two successive financial years.
  • Exemption Limit: Exemption limit for DVAT registration increased to Rs. 20 Lakh from Rs. 10 Lakh
  • TDS on Works Contracts: The rate of TDS increased from 4% to 6% in case of contractors/ sub-contractors not registered under DVAT Act.
  • Audit of Accounts – In case of failure, penalty increased from Rs. 10000 to Rs. 1 Lakh or 1% of Turnover whichever is less.
  • For the purpose of calculation of DVAT payable – Imported goods cannot be sold below the value determined by the Custom Authorities for payment of Custom Duty


CA Rahul Jain



Within days of amending the DVAT Act regarding non-eligibility of full Input Tax Credit on Central Sales (Concessional Rate of Tax), the DVAT department is out with another blow for dealer registered under Delhi VAT Act.


Vide Circular No. 05 dated 29-06-2012, it has become mandatory to fill online ( details of the C/ F Form received, missing forms and tax paid in lieu of missing C Forms for the period 2009-10 and 2010-11. What is most disheartening is that the above information is to be furnished on or before 20-07-12


Para 5 of the circular states that “default assessment will be framed only to the extent of missing and unverified central declaration forms in respect of which due tax and interest has not been deposited by the dealers”

It means if a dealer has not received forms for the year 2009-10 & 2010-11 from his customer yet, he will have to deposit the tax along with interest by 20th July’2012.


Para 6 of the circular states that “in cases where no information is furnished online, it will be presumed, that no Central Declaration Forms have been submitted ………. and such cases will be assessed on priority basis”


For future, it may be treated as a positive step from the DVAT department, as it will be convenient to file DVAT-51 online. However, it has also created undue pressures who have not received the C/F form for the year 2009-10 and 2010-11 yet. Such persons have been left with no choice. Either they will have to arrange the forms from their buyer before the very near deadline or they would have to deposit the differential tax to avoid penalty etc.


Last 2 lines of Para 7 of the circular is worth noting to understand the upcoming impact of this circular: “kindly file the requisite information online, positively by 20th July’ 2012, so as to avoid inconvenience, adverse assessment and Penalty at a later date”.


The department does not seems to provide any further extension to submit the C Forms and they have cleared themselves by closing the circular by the following line: “The Said link would be disabled after 20th July’ 2012”

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



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





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.


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:

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