The Delhi Value Added Tax, 2004

DELHI VALUE ADDED TAX ACT, 2004 (as on 5" March 2014) (Delhi Act 3 of 2005) As passed by the Legislative Assembly of the National Capital Territory of Delhi on the 22nd December 2004 and received the assent of the President of India on 15th February 2005 The Act has come into force with effect from Ist April 2005 vide Notification No. F.101(318)/2005-Fin.(A/Cs)(i)/8581, dated 30th March 2005 As amended by Delhi Value Added Tax (Amendment) Act, 2005 (1 of 2005) which came into effect from Ist April 2005 vide Notification No. F.101(318)/2005- Fin. (A/Cs) (ti)/8592, dated 30th March 2005 and subsequent amendments THE DELHI VALUE ADDED TAX ACT, 2004 AN ACT to consolidate and amend the law relating to levy of tax on sale of goods, tax on transfer of property involved in execution of works contracts, tax on transfer of right to use goods and tax on entry of motor vehicles by way of introducing a value added tax regime in the local areas of the National Capital Territory of Delhi. BE it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Fifty-fifth Year of the Republic of India as follows:- (1) Sec. 1 Delhi VAT Act as on 5" March 2014 CHAPTER I Preliminary 1 Short title, extent and commencement (1) This Act may be called the Delhi Value Added Tax Act, 2004. (2) It extends to the whole of the National Capital Territory of Delhi. (3) It shall come into force on such date as the Government may, by notification in the official Gazette, appoint: PROVIDED that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. 2 Definitions | Rules: 2(5), 44, 19,20 | Forms: 04, 07 (1) In this Act, unless the context otherwise requires, - (a) “accountant” means — (4) a chartered accountant within the meaning of the Chartered Accountant’s Act, 1949 (Act 38 of 1949); (41) a person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered; or '[Gii) a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959); or] “T(iv)] a person referred to in section 619 of the Companies Act, 1956 (1 of 1956); (b) “adequate proof’ means such documents, testimony or other evidence as may be prescribed; (c) “Appellate Tribunal” means the Appellate Tribunal constituted under section 73 of this Act; (d) “business” includes - *T(i)_ the provision of any services, but excluding the services provided by an employee; ] ' Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Re-lettered from “(iii)” to “(iv)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112 dated 28.03.2005 w.e.f. 01.04.2005. (1) Delhi VAT Act as on 5" March 2014 Sec. 2 (41) any trade, commerce or manufacture; (i411) any adventure or concern in the nature of trade, commerce or manufacture; (iv) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and (v) any occasional transaction in the nature of such service, trade, commerce, manufacture, adventure or concern whether or not there is volume, frequency, continuity or regularity of such transaction; whether or not such service, trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such service, trade, commerce, manufacture, adventure or concer; Explanation.- For the purpose of this clause — (i) any transaction of sale or purchase of capital assets pertaining to such service, trade, commerce, manufacture, adventure or concern shall be deemed to be business; (41) purchase of any goods, the price of which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be business; 'T(e) “business premises” includes - (i) _ the address of a dealer, registered with the Commissioner, (ii) any building or place used by a person for the conduct of his business, except for those parts of the building or place used principally as a residence; (iii) any place from where a dealer carries on business through an agent (by whatever name called), the place of busine. ch agent; and a warehouse, godown or suc r place where a dealer stores his goods.] [Rule: 19] *T(f) “capital goods” means plant, machinery and equipment used, directly or indirectly, in the process of trade or manufacturing or for execution of works contract in Delhi; ] (g) “casual trader” means a person who, whether as principal, agent or in any other capacity undertakes occasional transactions in the nature of business involving buying, selling, supply or distribution of goods or conducting any exhibition-cum-sale in Delhi whether for cash, deferred payment, commission, remuneration or other valuable consideration; ' Substituted vide DVAT (Amendment) Act, 2013 (05 of 2013); No.F.14(5)/LA-2013/ com.2law/65, dated 9.9.2013 read with No.F.3(14)/Fin.(Rev.-1)/2013-14/dsVI/703, dated 11.9.2013 w.e.f. 12.09.2013; earlier read as, “(e) “business premises” means - (i) the address of a dealer, registered with the Commissioner; and (i1) any building or place used by a person for the conduct of his business, except for those parts of the building or place used principally as a residence”. * Substituted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005, earlier read as, “(f) “capital goods” means plant, machinery and equipment used in the process of trade or manufacturing;”. (2) Sec. 2 Delhi VAT Act as on 5" March 2014 (h) “Commissioner” means the Commissioner of Value Added Tax appointed under sub-section (1) of section 66 of this Act; Gi) “in the course of” includes activities done for the purposes of, in connection with, or incidental to and activities done as part of the preparation for the activity and in the termination of, the activity; 'lG) “dealer” means any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business, buys or sells goods in Delhi directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes, - (4) a factor, commission agent, broker, del credere agent or any other mercantile agent by whatever name called, who for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of the business, buys or sells or supplies or distributes any goods on behalf of any principal or principals whether disclosed or not ; (41) a non-resident dealer or as the case may be, an agent, residing in the State of a non-resident dealer, who buys or sells goods in Delhi for the purposes of or ' Substituted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. Earlier read as :- “(j) “dealer” means any person who carries on business in Delhi and includes— (1) any person who, for the purposes of or in connection with or incidental to or in the course of his business buys, sells, goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration; (ii) any department of the Central Government or a State Government, a local authority, Panchayat, Municipality, Development Authority, Cantonment Board and each autonomous or statutory body or an industrial, commercial, banking, insurance or trading undertaking whether or not of the Central Government or any of the State Governments or of a local authority, if it buys, sells, supplies or distributes goods; (111) a factor, commission agent, broker, del credere agent, or any other mercantile agent by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal, whether disclosed or not; (iv) an agent of a non-resident (where such non-resident is a dealer under any other sub- clause of this definition); (v) a local branch of a firm or company or association of persons, outside Delhi where such firm, company, association of persons is a dealer under any other sub-clause of this definition; (vi) a club, association, society, trust, or cooperative society, whether incorporated or unincorporated, which buys goods from or sells goods to its members for price, fee or subscription, whether or not in the course of business; (vil) an auctioneer, who sells or auctions goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal; (vill) a casual trader; or (ix) any person who, for the purposes of or in connection with or incidental to or in the course of his business disposes of any goods as unclaimed or confiscated, or unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale;”. (3) Delhi VAT Act as on 5" March 2014 Sec. 2 consequential to his engagement in or in connection with or incidental to or in the course of the business; (111) a local branch of a firm or company or association of persons, outside Delhi where such firm company, association of persons is a dealer under any other sub-clause of this definition; (iv) a club, association, society, trust, or cooperative society, whether incorporated or unincorporated, which buys goods from or sells goods to its members for price, fee or subscription, whether or not in the course of business; (v) an auctioneer, who sells or auctions goods whether acting as an agent or otherwise or, who organizes the sale of goods or conducts the auction of goods whether or not he has the authority to sell the goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal; (vi) acasual trader ; (vil) any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business disposes of any goods as unclaimed or confiscated, or as unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale. Explanation.- For the purposes of this clause, each of the following persons, bodies and entities who sells any goods whether in the course of his business, or by auction or otherwise, directly or through an agent for cash or for deferred payment or for any other valuable consideration, shall, notwithstanding anything contained in clause (d) or any other provision of this Act, be deemed to be a dealer, namely:- (14) Customs Department of Government of India administering Customs Act, 1962 (52 of 1962); (41) Departments of Union Government, State Governments and Union territory Administrations; (11) Local authorities, Panchayats, Municipalities, Development Authorities, Cantonment Boards; (iv) Public Charitable Trusts; (v) Railway Administration as defined under the Indian Railways Act, 1989 (24 of 1989) and Delhi Metro Rail Corporation Limited; (vi) Incorporated or unincorporated societies, clubs or other associations of persons; (vil) Each autonomous or statutory body or corporation or company or society or any industrial, commercial, banking, insurance or trading undertaking, corporation, institution or company whether or not of the Union Government or any of the State Governments or of a local authority; (viii) Delhi Transport Corporation; (ix) Shipping and construction companies, air transport companies, airlines and advertising agencies. ] (4) Sec. 2 Delhi VAT Act as on 5" March 2014 (k) “Delhi” means the National Capital Territory of Delhi; (1) “fair market value” means the value at which goods of like kind and quality are sold or would be sold in the same quantities between unrelated parties in the open market in Delhi; (m) “goods” means every kind of moveable property (other than newspapers, actionable claims, stocks, shares and securities) and includes - (i) _ livestock, all materials, commodities, grass or things attached to or forming part of the earth which are agreed to be severed before sale or under a contract of sale; and (41) property in goods (whether as goods or in some other form) involved in the execution of a works contract, lease or hire-purchase or those to be used in the fitting out, improvement or repair of movable '/or immovable] property; (n) “goods vehicle” means a motor vehicle, vessel, boat, animal and any other form of conveyance used for carrying goods; (o) “Government” means the Lieutenant Governor of the National Capital Territory of Delhi appointed by the President under article 239 and designated as such under article 239AA of the Constitution; (p) “import of goods into Delhi” means taking, receiving, bringing, carrying, transporting, or causing to bring or receive goods into Delhi from any place outside Delhi; Explanation.- In the case of goods arriving in Delhi from a foreign country through Customs, the “import of the goods in Delhi” occurs at the place where the goods are cleared by Customs for home consumption; (q) “importer” means - (i) | aperson who brings his own goods into Delhi; or (41) a person on whose behalf another person brings goods into Delhi; or (111) 1m the case of a sale occurring in the circumstances referred to in sub- section 2 of section 6 of the Central Sales Tax Act, 1956 (74 of 1956), the person in Delhi to whom the goods are delivered; (tr) “input tax” in relation to the purchase of goods, means the proportion of the price paid by the buyer for the goods which represents tax for which the selling dealer is liable under this Act; *I(ra) “manufacture” with its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods, but does not include any such process or mode of manufacture as may be prescribed;] /Rule: 2(5)] ' Inserted vide DVAT (Amendment) Act, 2013 (05 of 2013); No.F.14(5)/LA-2013/ com.2law/65, dated 9.9.2013 read with No.F.3(14)/Fin.(Rev.-1)/2013-14/dsVI/703, dated 11.9.2013 w.e.f. 12.09.2013. * Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (5) Delhi VAT Act as on 5" March 2014 Sec. 2 (s) “net tax” means the amount calculated for a tax period under section 11 of this Act; (t) ‘“non-creditable goods” means the goods listed in the Seventh Schedule; (v) “non-resident” means a person who has no fixed place of business or residence in Delhi; (w) “notified” means notified by the Commissioner in the official Gazette; (x) “official Gazette” means the Delhi Gazette; (y) “prescribed” means prescribed by rules made under this Act; (z) “registered dealer” means a dealer registered under this Act; (za) a person is “related” to another person (referred to in this definition as a “dealer’’) if the person - (i) isarelative of the dealer; (41) 18 a partnership of which the dealer is a partner; (411) 1s a company in which the dealer (either alone or in conjunction with another person who is, or persons who are, related to the dealer under another sub- clause of this clause) directly or indirectly holds forty per cent or more of outstanding voting stock or shares; (iv) 1s a person who (either alone or in conjunction with another person who is, or other persons who are, related to the person under another sub-clause of this clause) directly or indirectly owns forty per cent or more of outstanding voting stock or shares of the dealer; (v) is a company in which forty per cent or more of outstanding voting stock is held directly or indirectly by a person (either alone or in conjunction with another person who is, or other persons who are, related to the person under another sub-clause of this clause) who also holds forty per cent or more of the outstanding voting stock or shares of the dealer; or (vi) 1s controlled by the dealer, a person whom the dealer controls, or is a person who is controlled by the same person who controls the dealer; (zb) “relative” means a relative as defined in clause 41 of section 2 of the Companies Act, 1956 (lof 1956); (zc) “sale” with its grammatical variations and cognate expression means any transfer of property in goods by one person to another for cash or for deferred payment or for other valuable consideration (not including a grant or subvention payment made by one government agency or department, whether of the central government or of any state government, to another) and includes- (i) a transfer of goods on hire purchase or other system of payment by installments, but does not include a mortgage or hypothecation of or a charge or pledge on goods; (i) supply of goods by a society (including a co-operative society), club, firm, or any association to its members for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether or not in the course of business; (6) Sec. 2 Delhi VAT Act as on 5" March 2014 (111) transfer of property in goods by an auctioneer referred to in sub-clause (vii) of clause (J) of this section, or sale of goods in the course of any other activity in the nature of banking, insurance who in the course of their main activity also sell goods repossessed or re-claimed; (iv) transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration; (v) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; (vi) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; (vil) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration; (viii) every disposal of goods referred to in sub-clause '[(vii)] of clause (j) of this *Tsub-section] and the words “sell”, buy” and “purchase” wherever appearing with all their grammatical variations and cognate expressions, shall be construed accordingly; (zd) “sale price” means the amount paid or payable as valuable consideration for any sale, including- (i) the amount of tax, if any, for which the dealer is liable under section 3 of this Act; (41) im relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable to a person for such delivery including hire charges, interest and other charges incidental to such transaction; (411) in relation to transfer of the right to use any goods for any purpose (whether or not for a specified period) the valuable consideration or hiring charges received or receivable for such transfer; (iv) any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof; (v) *Tamount of duties levied or leviable on the goods under the Central Excise Act, 1944 (1 of 1944) or the Customs Act, 1962 (52 of 1962), or the Delhi ' Substituted for number “(ix)”, vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. * Substituted for the word “section”, vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. * Substituted for the words, “amount of duties levied or leviable on the goods under the Central Excise Act, 1944 (1 of 1944) or the Customs Act, 1962 (52 of 1962), or the Punjab Excise Act, 1914 (1 of 1914) as extended to the National Capital Territory of Delhi whether such duties are payable by the seller or any other person; and”, vide Notification No. F,.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/ dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. (7) Delhi VAT Act as on 5" March 2014 Sec. 2 Excise Act, 2009 (Delhi Act 10 of 2010) whether such duties are payable by the seller or any other person; and] (vi) amount received or receivable by the seller by way of deposit (whether refundable or not) which has been received or is recetvable whether by way of separate agreement or not, in connection with, or incidental to or ancillary to the sale of goods; (vil) in relation to works contract means the amount of valuable consideration paid or payable to a dealer for the execution of the works contract; less - (a) any sum allowed as discount which goes to reduce the sale price according to the practice, normally, prevailing in trade; (b) the cost of freight or delivery or the cost of installation in cases where such cost is separately charged; and the words “purchase price” with all their grammatical variations and cognate expressions, shall be construed accordingly; 1 pear] “peer ' The provisos which read as - “PROVIDED that an amount equal to the increase in the prices of petrol and diesel (including the duties and levies charged thereon by the Central Government) taking effect from the 6" June, 2006 shall not form part of the sale price of petrol and diesel sold on and after the date of the commencement of the Delhi Value Added Tax (Amendment) Act, 2006 till such date as the Government may, by notification in the official Gazette, direct: PROVIDED FURTHER that the first proviso shall not take effect till the benefit is passed on to the consumer.” have ceased to be effective vide No. F.3(8)/Fin.(T&E)/2007-08/dsfte/428, dated 5.6.2007 w.e.f. 5.6.2007. Earlier inserted vide Delhi Value Added Tax (Amendment) Act, 2006 (No. F.14(23)/ LA-2006/LJ/06/7441, dated 24.11.2006 w.e.f. 20.6.2006. (Originally inserted vide Delhi Value Added Tax (Amendment) Ordinance, 2006; Ordinance No. 1 of 2006, dated 20.6.2006.) The provisos which read as - “PROVIDED that an amount equal to the increase in the price of diesel (HSD) (including the duties and levies charged thereon by the Central Government) taking effect from the 25" June, 2011 shall not form part of the sale price of diesel (HSD) sold on or after the date of the commencement of the Delhi Value Added Tax (Second Amendment) Act, 2011 tll such date as the Government may, by notification in the official Gazette, direct or if the price of diesel (HSD) falls below the sale price prior to 25" June, 2011, whichever is earlier: PROVIDED further that if the price of diesel (HSD) further increases from the level of price as on 25"" June, 2011, the first proviso shall not have any effect on such further increase: PROVIDED also that if the price of diesel (HSD) declines but remains above the price prevailing prior to 25" June, 2011, the first proviso shall have effect to the extent of the remaining increase: PROVIDED also that the first proviso shall not take effect till the benefit is passed on to the consumers.” have ceased to be effective vide DVAT (Second Amendment) Act, 2012; No.F.14(6)/LA- 2012/cons2law/61, dated 15.06.2012 read with No.F.3(6)/Fin.(Rev.-1)/2012-13/SSF/92 dated 16.06.2012 w.e.f. 18.06.2012. Earlier inserted vide DVAT (Second Amendment) Act, 2011; No. F.14(6)/LA-2011/claw/193, dated 28.09.2011 read with notification No. F,3(15)/Fin.(Rev-D/201 1-12/ssf/113 dated 30.09.2011 w.e.f. 25.06.2011. 2 (8) Sec. 2 Delhi VAT Act as on 5" March 2014 1 pear] *[PROVIDED that where the dealer makes sale of goods imported into the territory of India, the sale price shall be greater of the following: (a) the valuable consideration received or receivable by the dealer; (b) value determined by the Custom authorities for payment of custom duty at the time of the import of such goods. ] *[Explanation-1.]- A dealer’s sale price always includes the tax payable by it on making the sale, if any; /Rule: 4A] *[Explanation.-2 - The amount received or receivable by oil marketing companies for the sale of diesel and petrol shall be deemed to be equivalent to the price on which the retail outlets will sell these commodities to the consumer. | (ze) “Schedule” means a Schedule appended to this Act; (zf) “tax” means tax payable under this Act; (zg) “taxable quantum” means the amount defined in sub-section (2) of section 18 of this Act; (zh) “tax invoice” means the document defined in section 50 of this Act; (zi) “tax period” means the period prescribed in the rules made under this Act; [Rule 26] ' The provisos which read as — “PROVIDED that an amount equal to the increase in the price of petrol (including the duties and levies charged thereon by the Central Government) taking effect from the 3 June, 2012 shall not form part of the sale price of petrol sold on or after the date of the commencement of the Delhi Value Added Tax (Third Amendment) Act, 2012 till such date as the Government may, by notification in the official Gazette, direct or if the price of petrol falls below the sale price prior to 3“ June, 2012, whichever is earlier: PROVIDED further that if the price of petrol further increases from the level of price as on 3rd June, 2012, the aforesaid proviso shall not have any effect on such further increase: PROVIDED also that if the price of petrol declines but remains above the price prevailing prior to 3rd June, 2012, the aforesaid proviso shall have effect to the extent of the remaining increase: PROVIDED also that the aforesaid proviso shall not take effect till the benefit is passed on to the consumers.” have ceased to be effective vide notification No.F.14(13)/LA-2012/cons2law/179 dated 28.12.2012 read with No.F.3(9)/Fin.(Rev.-1)/2012-13/dsvi/34-39 dated 15.01.2013 w.e.f. 16.01.2013. Earlier inserted vide No. F.14(4)/LA-2012/cons2law/71 dated 15.06.2012 read with No.F.3(7)/ Fin.(Rev.-1)/2012-13/SSF/93 dated 16.06.2012 w.e.f. 18.06.2012. * Inserted vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. > Re-numbered from “Explanation” to “Explanation-1” vide notification No.F.14(13)/LA- 2012/cons2law/179 dated 28.12.2012 read with No.F.3(9)/Fin.(Rev.-1)/2012-13/dsvi/34-39 dated 15.01.2013 w.e.f. 16.01.2013. * Inserted vide notification No.F.14(13)/LA-2012/cons2law/179 dated 28.12.2012 read with No.F.3(9)/Fin.(Rev.-1)/2012-13/dsvi/34-39 dated 15.01.2013 w.e.f. 16.01.2013. (9) Delhi VAT Act as on 5" March 2014 Sec. 2 (zj) “tax fraction” means the fraction calculated in accordance with formula, r/ (r+100) where ‘r’ is the percentage rate of tax applicable to the sale under this Act; (zk) “transporter” means any person who, for the purposes of or in connection with or incidental to or in the course of his business transports or causes to transport goods, and includes any person whose business consists of or includes operating a railway, shipping company, air cargo terminal, inland container depot, container freight station, courier service or airline; (zl) “turnover of purchases” means the aggregate of the amounts of purchase price paid or payable by a person in any tax period, 'Texcluding] any input tax; (zm) “turnover” means the aggregate of the amounts of sale price received or receivable by the person in any tax period, reduced by any tax for which the person is liable under section 3 of this Act; (zn) “value of goods” means the fair market value of the goods at that time including insurance charges, excise duties, countervailing duties, tax paid or payable under the Central Sales Tax Act, 1956 (74 of 1956) in respect of the sale, transport charges, freight charges and all other charges incidental to the transaction of the goods; (zo) “works contract” includes any agreement for carrying out for cash or for deferred payment or for valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, repair or commissioning of any moveable or immovable property; (zp) “year” means the financial year from the first day of April to the last day of March; (2) Unless otherwise specified in this Act- (a) words importing the masculine gender shall include the feminine gender; (b) words in singular shall include their plural and vice versa; (c) expressions referring to “writing” shall include printing, typing, lithography, photography and other methods of representing or reproducing words in a visible form; and (d) with reference to a person who is unable to sign his name, the words “signature” shall include his thumb impression or other mark duly attested to signify his signature. ' Substituted for the word “including” vide DVAT (Amendment) Act, 2012; No.F.14(19)/LA- 201 1/Iclaw/5, dated 13.02.2012 read with notification no.F.3(25)/Fin.(Rev.-D/2011-12/ DSII/288 dated 28.03.2012 w.e.f. 01.04.2012. (10) Sec. 3 Delhi VAT Act as on 5" March 2014 CHAPTER II Imposition of Tax 3 Imposition of tax |Rule: Nil Form: Nil (1) Subject to other provisions of this Act, every dealer who is — (a) registered under this Act; or (b) required to be registered under this Act; shall be liable to pay tax calculated in accordance with this Act, at the time and in the manner provided in this Act. '[(2) Every dealer shall be liable to pay tax at the rates specified in section 4 of this Act on every sale of goods effected by him — (a) while he is a registered dealer under this Act; or (b) —onand from the day on which he was required to be registered under this Act.] *1(3) The amount of tax payable under this Act by a dealer, is the dealer’s net tax for the tax period calculated under section 11 of this Act.] *1(4) The net tax of a dealer shall be paid within twenty one days of the conclusion of each calendar month. Explanation.- The obligation to pay the tax arises by virtue of this provision and is not dependent on furnishing a return, nor on the issue of a notice of assessment to the dealer. ] (5) Tax shall be paid in the manner specified in section 36 of this Act. ' Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013, for the words, - (4) the net tax of a dealer shall be paid within #[twenty-one] days of the conclusion of the dealer’s tax period: PROVIDED that the Commissioner may, by an order, prescribe that irrespective of the tax period of a dealer or class of dealers, the net tax of a dealer or a class of dealers shall be paid within ##[21] days of the conclusion of a period shorter than the tax period that may be specified in the order.” # Substituted for the words, “twenty-eight” vide DVAT (Amendment) Act, 2012; No.F.14(19)/LA-2011/Iclaw/5 dated 13.2.2012 read with notification no.F.3(25)/ Fin.(Rev.-D/2011-12/DSITI/288 dated 28.3.2012 w.e.f. 1.4.2012. ## Substituted for the number “28” vide DVAT (Amendment) Act, 2012; No.F.14(19)/LA- 2011/Iclaw/5, dated 13.02.2012 read with notification no.F.3(25)/Fin.(Rev.-D/2011-12/ DSIII/288 dated 28.03.2012 w.e.f. 01.04.2012. (1) Delhi VAT Act as on 5" March 2014 Sec. 3 (6) Every dealer who has become liable to pay tax under this Act on the sale of goods shall continue to be so liable unless his taxable turnover during the preceding twelve months (and such further period as may be prescribed) has remained below the taxable quantum and on the expiry of the twelve months or such further period his liability to pay tax shall cease: PROVIDED that any dealer whose liability to pay tax under this Act ceases for any other reason may apply earlier for the cancellation of his registration, and on such cancellation, his liability to pay tax shall cease: PROVIDED FURTHER that a dealer shall remain liable to pay tax until the date on which his registration is cancelled. (7) Every dealer whose liability to pay tax under this Act has ceased or whose registration has been cancelled, shall, if his turnover calculated from the commencement of any year, including the year in which the registration has been cancelled, again exceeds the taxable quantum on any day within such year be liable to pay such tax on and from the date on which his turnover again exceeds the taxable quantum, on all sales effected by him on and after that day. (8) Where it is found that any person registered as a dealer ought not to have been so registered, then notwithstanding anything contained in this Act, such person shall be liable to pay tax for the period during which he was registered. (9) If any person who transports goods or holds goods in custody for delivery to or on behalf of any person, on being required by the Commissioner so to do, fails — (a) to furnish any information in his possession in respect of the goods; or (b) fails to permit inspection thereof; then without prejudice to any other action which may be taken against such person, a presumption may be raised that the goods in respect of which he has failed to furnish information or permit inspection, are owned by him and are held by him for sale in Delhi and the provisions of this Act shall apply accordingly. 'T(10) If any person who, whether as principal, agent or in any other capacity organizes any exhibition-cum-sale in Delhi and fails — (a) to furnish any information in respect of the goods brought or kept in stock or sold by any participant before or during or after the exhibition-cum-sale; or (b) to ensure that all the participants in the exhibition-cum-sale have obtained registration under this Act and paid due tax; or (c) to permit inspection of the business premises or goods or account and records of the participants; or (d) to permit inspection of the accounts and records of the organizer in respect of the exhibition-cum-sale; then, without prejudice to any other action which may be taken against such participant, a presumption may be raised that the goods of the participant who fails to obtain registration under this Act or the goods in respect of which the ' Inserted vide DVAT (Second Amendment) Act, 2005; No.F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. (2) Sec. 4 Delhi VAT Act as on 5" March 2014 participant has failed to furnish information or failed to permit inspection, are owned by the organizer and are held by him for sale in Delhi and the provisions of this Act shall apply accordingly. ] 4 Rates of tax |Rule: 7B Form: Nil (1) The rates of tax payable on the taxable turnover of a dealer shall be- (a) in respect of goods specified in the Second Schedule, at the rate of one paisa in the rupee; 'T(b) in respect of goods specified in the Third Schedule, at the rate of five paise in the rupee: “TRY (c) imrespect of goods specified in the Fourth Schedule, at the rate of twenty paise in the rupee; *[***] “I(d)_ in respect of the goods involved in the execution of the works contract, at the rate of twelve and a half paise in the rupee; and] °>[PROVIDED that tax shall be paid at the rate of “Tfive] paise in the rupee of the turnover of the dealer pertaining to declared goods, as defined from time to time in the Central Sales Tax Act, 1956 (74 of 1956), involved in the execution of works contract if such goods are transferred from the contractor to the contractee in the same form in which they were purchased by the contractor: PROVIDED FURTHER that in respect of the works contracts which are in the nature of printing works, the rate of tax shall be five] paise in the rupee. ] ' Substituted vide DVAT (Amendment) Act, 2009; No.F.14(16)/LA-2009/LJ/10/vlaw/1, dated 06.01.2010 and No. F.3(23)/Fin(T&E)/2009-10/JSF/15-25, dated 13.01.2010 wee-f. 13.01.2010, earlier read as, “(b) in respect of goods specified in the Third Schedule, at the rate of four paise in the rupee;” * Omitted the words “PROVIDED that tax shall be paid at the rate of four paise in the rupee of the taxable turnover of the dealer pertaining to declared goods, as defined from time to time in the Central Sales Tax Act, 1956 (74 of 1956);” vide DVAT (Second Amendment) Act, 2011; No. F.14(6)/LA-201 1/Iclaw/193, dated 28.09.2011 w.e.f. 01.10.2011 vide notification No. F.3(15)/Fin.(Rev-D/2011-12/ssf/113 dated 30.09.2011. * Omitted the word “and” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. “Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. > Inserted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 01.04.2005, retrospectively. ° Substituted for the word “four” vide DVAT (Second Amendment) Act, 2011; No. F,14(6)/LA-201 1/Iclaw/193, dated 28.09.2011 w.e.f. 01.10.2011 vide notification No. F.3(15)/Fin.(Rev-D/2011-12/ssf/113 dated 30.09.2011. ’ Substituted for the word “four” vide DVAT (Amendment) Act, 2010; No.F.14(5)/LA-2010/ vlaw/359, dated 31.12.2010 read with No. F.3(29)/Fin.(T&E)/2009-10/asf/6, dated 31.01.11, w.e.f. 1.2.2011. (3) Delhi VAT Act as on 5" March 2014 Sec. 5 'T(e)] in the case of any other goods, at the rate of twelve and a half paise in the rupee: PROVIDED that the rate of tax on packing materials or containers shall be the same as the rate at which the goods sold are chargeable to tax. (2) The Government may, if it deems necessary, reduce the rates of tax as specified in sub-section (1), by a notification to that effect in the official Gazette. 5 Taxable turnover |Rule: 3 | Form: Nil (1) For the purposes of this Act, taxable turnover means that part of dealer’s turnover arising during the tax period which remains after deducting therefrom - (a) the turnover of sales not subject to tax under section 7 of this Act; and (b) the turnover of sales of goods declared exempt under section 6 of this Act. *1(2) In the case of turnover arising from the execution of a works contract, the amount included in taxable turnover is the total consideration paid or payable to the dealer under the contract excluding the charges towards labour, services and other like charges, subject to such conditions as may be prescribed: PROVIDED that where the amount of charges towards labour, services and other like charges is not ascertainable from the books of accounts of the dealer, the amount of such charges shall be calculated at the prescribed percentages. | 6 Sale exempt from tax |Rule: Nil Form: Nil (1) The sale of goods listed in the First Schedule shall be exempt from tax subject to the conditions and exceptions set out therein. (2) The dealers or class of dealers specified in the Fifth Schedule shall be exempt from payment of tax on all sales of goods effected by them subject to such conditions as may be prescribed. (3) Where a dealer sells capital goods which he has used since the time of purchase exclusively for purposes other than making non-taxed sale of goods, and has not claimed a tax credit in respect of such capital goods under section 9, the sale of such capital goods shall be exempt from tax. ' Re-lettered from “(d)” to “(e)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (4) Sec. 7 Delhi VAT Act as on 5" March 2014 7 Certain sales not liable to tax Rule: Nil Form: Nil Nothing contained in this Act or the rules made thereunder shall be deemed to impose or authorise the imposition of tax on any sale of goods when such sale takes place - (a) inthe course of inter-state trade or commerce; or (b) outside Delhi; or (c) inthe course of import of the goods into or export of the goods out of, the territory of India. Explanation. - Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining whether or not a particular sale takes place in the manner indicated in clause (a), clause (b) or clause (c) of this section. 'T(d) in accordance with the notification issued by the Central Government in exercise of its powers under section 3 of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel) Act, 2002 (36 of 2002), no tax shall be levied on sales of the fuel and lubricants which are filled into receptacles forming part of any aircraft registered in a country other than India, if- (i) the said country is a party to the Convention on International and Civil Aviation, 1944; and (ii) | the said country has entered into an Air Services agreement with India; and (111) the aircraft is operating on a scheduled or non-scheduled service to or from India. ] 8 Adjustments to tax Rule: 7A Form: Nil (1) [Subject to such conditions as may be prescribed, this section shall apply where, in relation to the sale of goods by any dealer —] (a) that sale has been cancelled; (b) the nature of that sale has been fundamentally varied or altered; (c) the previously agreed consideration for that sale has been altered by agreement with the recipient, whether due to the offer of a discount or for any other reason; "Inserted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 01.04.2005, retrospectively. * Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (5) Delhi VAT Act as on 5" March 2014 Sec. 8 'T(d) the goods or part of the goods sold have been returned to the dealer within six months of the date of sale; or] (ce) the whole or part of the price owed by the buyer for the purchase of the goods has been written-off by the dealer as a bad debt; and the dealer has — (i) provided a tax invoice in relation to that sale and the amount shown therein as tax charged on that sale is not the tax properly chargeable on that sale; or (ii) furnished a return in relation to a tax period in respect of which tax on that sale is attributable, and has accounted for an amount of tax on that sale that is not the amount properly chargeable on that sale. (2) Where a dealer has accounted for an incorrect amount of tax as contemplated in sub-section (1), that dealer shall make an adjustment in calculating the tax payable by that dealer in the return for the tax period during which it has become apparent that the tax is incorrect, and if — (a) the tax payable in relation to that sale exceeds the tax actually accounted for by the dealer, the amount of that excess shall be deemed to arise in the tax period in which the adjustment is made, and shall not be attributable to any prior tax period; or (b) the tax actually accounted for exceeds the tax payable in relation to the sale, the amount of that deficiency shall be subtracted from the tax payable by the dealer in the tax period in which the adjustment is made, and shall not be attributable to any prior tax period. (3) Where a dealer sells goods that have been used in part for making - (a) _ sales that are subject to tax under this Act or sales that are not liable to tax under section 7; and (b) partly for other purposes, the amount of tax on the sale of the goods shall be the greater of - G) A-(AxB/OC); or (Gi) A-B; where A= the tax for which the dealer would be liable in respect of the sale apart from this section; B= the amount by which the tax credit of the dealer in respect of the goods was reduced under sub-section (4) of section 9 of this Act; C= the amount of the tax credit before reduction under sub-section (4) of section 9 of this Act. ' Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005, earlier read as, “(d) the goods or part of the goods sold have been returned to the dealer; or’. (6) Sec. 9 Delhi VAT Act as on 5" March 2014 9 Tax credit Rules: 6, 7 Form: Nil 1) Subject to sub-section (2) of this section and such conditions, restrictions and limitations as may be prescribed, a dealer who is registered or is required to be registered under this Act shall be entitled to a tax credit in respect of the turnover of purchases occurring during the tax period *twhere the purchase arises] in the course of his activities as a dealer and the goods are to be used by him directly or indirectly for the purpose of making — (a) — sales which are liable to tax under section 3 of this Act; or (b) — sales which are not liable to tax under section 7 of this Act. Explanation.- Sales which are not liable to tax under section 7 of this Act involve exports from Delhi whether to other States or Union territories or to foreign countries. ] (2) No tax credit shall be allowed — (a) in the case of the purchase of goods for goods purchased from a person who is not a registered dealer; (b) for the purchase of non-creditable goods; (c) for the purchase of goods which are to be incorporated into the structure of a building owned or occupied by the person; Explanation.- This sub-section does not prevent a tax credit arising for goods and building materials that are purchased either for the purpose of re-sale in an unmodified form, or for the performance of a works contract on a building owned or occupied by another; (d) for goods purchased from a dealer who has elected to pay tax under section 16 of this Act; *I(e) for goods purchased from a casual trader;] ' Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. Substituted for the words, “to the extent of proportion of the goods which have been put to sale” vide DVAT (Second Amendment) Act, 2011; No. F.14(6)/LA-2011/Iclaw/193, dated 28.09.2011 w.e.f. 01.10.2011 vide notification No. F.3(15)/Fin.(Rev-I)/2011-12/ssf/113 dated 30.09.2011. Earlier the words “to the extent of proportion of the goods which have been put to sale” were substituted for the words, “where the purchase arises” vide DVAT (Amendment) Act, 2009; No.F.14(16)/LA-2009/LJ/10/vlaw/1, dated 06.01.2010 and came into force vide No.F.3(23)/Fin.(T&E)/2009-10/jsfin/286, dated 01.04.2010 w.e-f. 01.04.2010. Therefore, after the amendment w.e.f. 01.10.2011, the original status of section 9(1) has been maintained. * Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. N (7) Delhi VAT Act as on 5" March 2014 Sec. 9 '(?{(f)} to the dealers or class of dealers specified in the Fifth Schedule except the entry no.1 of the said Schedule. ] *T(g) to the dealers or class of dealers unless the tax paid by the purchasing dealer has actually been deposited by the selling dealer with the Government or has been lawfully adjusted against output tax liability and correctly reflected in the return filed for the respective tax period. | (3) The amount of the tax credit to which a dealer is entitled in respect of the purchase of goods shall be the amount of input tax arising in the tax period reduced in the manner described in sub-sections “[(4), (6) and (10)] of this section. (4) Where a dealer has purchased goods and the goods are to be used partly for the purpose of making the sales referred to in sub-section (1) of this section and partly for other purposes, the amount of the tax credit shall be reduced proportionately. (5) The method used by a dealer to determine the extent to which the goods are used in the manner specified in sub-section (4) of this section, shall be fair and reasonable in the circumstances: PROVIDED that the Commissioner may - (a) after giving reasons in writing, reject the method adopted by the dealer and calculate the amount of tax credit; and (b) prescribe methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in certain instances. Explanation.- A person may object in the manner referred to in section 74 of this Act to a decision of the Commissioner to reject a method of calculating a tax credit. (6) > [Notwithstanding anything contained to the contrary in sub-section (1), where -] (a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (1) of this section; (b) the goods or goods manufactured out of such goods are to be exported from Delhi by way of transfer to a — (4) non-resident consignment agent; or (41) non-resident branch of the dealer; and ' Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 01.04.2005, retrospectively, earlier read as, “(f) to the dealers or class of dealers specified in the Fifth Schedule.”. * Re-lettered from “(e)” to “(f)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. > Inserted vide DVAT (Amendment) Act, 2009; No.F.14(16)/LA-2009/LJ/10/vlaw/1, dated 06.01.2010 and come into force vide No.F.3(23)/Fin.(T&E)/2009-10/jsfin/286, dated 01.04.2010 w.e.f. 01.04.2010. * Substituted for the word and figures “(4) and (6)” vide DVAT (Second Amendment) Act, 2012; No.F.14(6)/LA-2012/cons2law/61, dated 15.06.2012 read with No.F.3(6)/Fin.(Rev.- 1)/ 2012-13/SSF/92 dated 16.06.2012 w.e.f. 18.06.2012. > Substituted for the word “Where” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (8) Sec. 9 Delhi VAT Act as on 5" March 2014 (c) the transfer will not be by way of a sale made in Delhi; the amount of the tax credit shall be reduced by the prescribed percentage. (7) For the removal of doubt, no tax credit shall be allowed for - (a) the purchase of goods from an unregistered dealer; (b) the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the First Schedule. 'T(c) any purchase of consumables or of capital goods where the dealer is exclusively engaged in doing job work or labour work and is not engaged in the business of manufacturing of goods for sale by him and incidental to the business of job work or labour work, obtains any waste or scrap goods which are sold by him. ] (8) The tax credit may be claimed by a dealer only if he holds a tax invoice at the time the prescribed return for the tax period is furnished. *[(9)(a) Notwithstanding anything contained to the contrary in sub-sections (1) and (3) and subject to sub-section (2), tax credit in respect of capital goods shall be allowed as follows: - (1) 1/3" of the input tax on such capital goods arising in the tax period, in the same tax period; (11) *[balance 2/3" of such input tax, in equal proportions, in corresponding tax periods, in two immediately successive financial years :] PROVIDED that, where the dealer sells such capital goods, the dealer shall be allowed as tax credit, the balance amount of the input tax, if any, in respect of such capital goods as has not been earlier availed as tax credit, such tax credit shall be allowed in the tax period in which such capital goods are sold and only after adjusting the output tax payable by him: “[PROVIDED FURTHER that where the dealer transfers such capital goods from Delhi otherwise than by way of sale before the expiry of three years from the date of purchase, he shall, after claiming the balance amount of input tax, if any, not availed earlier in respect of such capital goods, reduce the input tax credit by the prescribed percentage of the purchase price of such capital goods and make adjustments in the input tax credit in the tax period in which these capital goods are so transferred: "Inserted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. * Inserted vide No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted for the words, “balance 2/3" of such input tax, in equal proportions in two immediately successive financial years:”, vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. * Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005, earlier read as, “PROVIDED FURTHER that where the dealer exports from Delhi such capital goods otherwise than by way of sale, the dealer shall be allowed as tax credit, the balance amount of the input tax, if any, in respect of such capital goods as has not been availed earlier as tax credit, in the tax period in which such capital goods are transferred and as reduced by the prescribed percentage of the purchase price of such capital goods :”. (9) Delhi VAT Act as on 5" March 2014 Sec. 9 PROVIDED ALSO that where a dealer has purchased capital goods and the capital goods are to be used partly for the purpose of making sales referred to in sub-section (1) of this section and partly for other purposes, the amount of tax credit shall be reduced proportionately: ] PROVIDED ALSO that no tax credit in respect of capital goods shall be allowed if such capital goods are used exclusively for the purpose of making sale of exempted goods specified in the first schedule: PROVIDED ALSO that no tax credit in respect of capital goods shall be allowed on that part of the value of such capital goods which represents the amount of input tax on such capital goods, which the dealer claims as depreciation under section 32 of the Income Tax Act, 1961 (43 of 1961). (b) If any capital goods in respect of which tax credit is allowed under clause (a) of this sub-section is transferred to any other person otherwise than by way of sale at the fair market value before the expiry of a period of five years from the date of purchase, the tax credit claimed in respect of such purchase shall be '[reversed] in the tax period during which such transfer takes place. ] *T(10) Notwithstanding anything contained to the contrary in sub-section (1), where — (a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (1) of this section; and, (b) the goods or goods manufactured out of such goods are to be exported from Delhi by way of sale made under sub-section (1) of Section 8 of the Central Sales Tax Act, 1956, the amount of the tax credit shall be reduced by the prescribed percentage. ] *T(11) Subject to sub-section (1), (2) and (3) of this section, the tax credit of goods to be used for sale, as defined in sub-clause (vi) of clause (zc) of sub-section (1) of Section 2 of the Act, shall be allowed as follows: (a) 1/4" of the input tax on such goods arising in the tax period, in the same tax period; (b) balance 3/4" of such input tax, in equal proportions, in corresponding tax periods, in three immediately successive financial years. ] ' Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005 for the word “reduced”. * Inserted vide DVAT (Second Amendment) Act, 2012; No.F.14(6)/LA-2012/cons2law/61, dated 15.06.2012 read with No.F.3(6)/Fin.(Rev.-1)/2012-13/SSF/92 dated 16.06.2012 w.e.f. 18.06.2012. > Inserted vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. (10) Sec. 10 Delhi VAT Act as on 5" March 2014 10 Adjustment to tax credit |Rules: 6, 7 Form: Nil (1) Where any purchaser has been issued with a credit note or debit note in terms of section 51 of this Act or if he returns or rejects goods purchased, as a consequence of which the tax credit claimed by him in any tax period in respect of which the purchase of goods relates, becomes short or excess, he shall compensate such short or excess by adjusting the amount of the tax credit allowed to him in respect of the tax period in which the credit note or debit note has been issued or goods are returned. (2) If goods which have been purchased were - (a) intended to be used for the purposes specified under sub-section (1) of section 9 of this Act and are subsequently used, fully or partly, for purposes other than those specified under the said sub-section; or (b) intended for purposes other than those specified under sub-section (1) of said section 9 of this Act, and are subsequently used, fully or partly, for the purposes specified in the said sub-section; the tax credit claimed in respect of such purchase shall be reduced or increased (as the case may be) for the tax period during which the said utilization otherwise has taken place. (3) Where — (a) | goods were purchased by a dealer; (b) the dealer claimed a tax credit in respect of the goods, and did not reduce the tax credit by the prescribed percentage; and 'I(c) the goods are exported from Delhi, - (i) by way of a sale made as per the provisions of sub-section (1) of section 8 of the Central Sales tax Act, 1956; or (1) other than by way of a sale, to a branch of the registered dealer or to a consignment agent;] the dealer shall reduce the amount of tax credit originally claimed by the prescribed proportion (4) If goods which have been purchased by a dealer were — (a) intended to be used for the purposes specified under sub-section (1) of section 9 of this Act; and (b) are subsequently incorporated into the structure of a building owned or occupied by the person; the tax credit claimed in respect of such purchase shall be reduced in the tax period during which such incorporation takes place. ' Substituted vide DVAT (Second Amendment) Act, 2012; No.F.14(6)/LA-2012/cons2law/61, dated 15.06.2012 read with No.F.3(6)/Fin.(Rev.-1)/2012-13/SSF/92 dated 16.06.2012 w.e.f. 18.06.2012. Earlier read as:- “(c) the goods are exported from Delhi, other than by way of a sale, to a branch of the registered dealer or to a consignment agent;” (11) Delhi VAT Act as on 5" March 2014 Sec. 11 'I(5) Where the goods which have been purchased by a dealer are sold at a price lower than the price at which it was purchased by the dealer, the tax credit on such purchases shall be reduced proportionately in the tax period during which the goods are sold. Explanation. — The tax credit claimed on a particular purchase shall not exceed the amount of tax payable on its sale.] 11 Net tax |Rule: Nil Form: Nil (1) The net tax payable by a dealer for a tax period shall be determined by the formula: Net Tax =O-I-C where O = the amount of tax payable by the person at the rates stipulated in section 4 of this Act in respect of the taxable turnover arising in the tax period, adjusted to take into account any adjustments to the tax payable required by section 8 of this Act. I = the amount of the tax credit arising in the tax period to which the person is entitled under section 9 of this Act, adjusted to take into account any adjustments to the tax credit required by section 10 of this Act. C = the amount, if any, brought forward from the previous tax period under sub-section (2) of this section. (2) ?[Where the net tax of a dealer calculated under sub-section (1) of this section amounts to a negative value, the dealer shall - (a) adjust the said amount in the same tax period against the tax payable by him under the Central Sales Tax Act, 1956 (74 of 1956), if any; and (b) be entitled to carry forward the amount remaining after application under sub-section (2)(a) to next calendar month or tax period, as the case may be, of the same year, or ' Inserted vide DVAT (Amendment) Act, 2009; No.F.14(16)/LA-2009/LJ/10/vlaw/1, dated 06.01.2010 and come into force vide No.F.3(23)/Fin.(T&E)/2009-10/jsfin/286, dated 01.04.2010 w.e.f. 01.04.2010. * Substituted vide DVAT (Amendment) Act, 2013 (05 of 2013); No.F.14(5)/LA-2013/ com.2law/65, dated 9.9.2013 read with No.F.3(14)/Fin.(Rev.-1)/2013-14/dsVI/703, dated 11.9.2013 w.e.f. 12.09.2013; earlier read as, (2) Where the net tax of a dealer calculated under sub-section (1) of this section amounts to a negative value, the dealer shall — (a) adjust the said amount in the same tax period against the tax payable by him under the Central Sales Tax Act, 1956 (74 of 1956), if any; and (b) be entitled to claim a refund of any surplus amount and the Commissioner shall deal with the refund claim in the manner described in section 38 and section 39 of this Act. Explanation.- The dealer may elect to adjust the refund as a tax credit in the next tax period.”, (12) Sec. LIA Delhi VAT Act as on 5" March 2014 claim a refund of the amount remaining after application under sub-section (2)(a) at the end of a tax period of the same year and the Commissioner shall deal with the refund claim in the manner described in section 38 and section 39 of this Act. Explanations 1. Refund can be claimed at the end of a tax period only. 2. Excess tax credit should not be carried forward to the next year. 3. Refund of excess tax credit carried forward from previous years should be claimed in any of the remaining tax periods of year 2013-2014 but not later than the last tax period ending on 31.03.2014. 4. Excess tax credit remaining at the end of a tax period can either be claimed as refund or carried forward to next tax period of the same year. J. Excess payment made inadvertently shall also be treated as credit in a month or tax period as the case may be.] '{11A Tax on goods supplied by contractee |Rule: Nil Form: Nil No tax shall be payable under this Act by a contractor on the amount representing the value of the goods supplied by the contractee to the contractor in the execution of works contract in which the ownership of such goods remains with the contractee under the terms of the contract and the amount representing the value of the goods supplied by the contractee to the contractor does not form part of the contract and is not deductible from the amount payable to the contractor by the contractee for the execution of the works contract. ] 12 Time at which turnover, turnover of purchases and adjustments arise |Rule: 4 | Form: Nil | (1) Subject to sub-sections (2), (3) and (4) of this section, the amount of the turnover and the turnover of purchases of a dealer which arises during any tax period shall be the amount recorded in the accounts of the dealer where those accounts are regularly and systematically prepared and maintained, give a true and fair view of his dealings, and are employed by the dealer in determining the turnover of the dealer’s business for commercial or income tax purposes. (2) The Commissioner may by notification — (a) permit certain classes of dealer to record turnover based on amounts paid or received; and (b) require certain classes of dealer to record turnover based on amounts payable or receivable. (3) Where a dealer wishes to change the method of determining the turnover and turnover of purchases, he may only make the change with the consent of the Commissioner and on such terms and conditions as the Commissioner may impose. ' Section 11A was inserted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/ 2005/333, dated 16.11.2005 w.e.f. 16.11.2005. (13) Delhi VAT Act as on 5" March 2014 Sec. 12 (4) The Government may prescribe the time at which a dealer shall treat the — (a) turnover; (b) turnover of purchases; and (c) adjustment of tax or adjustment to a tax credit; as arising for a class of transactions. (14) Sec. 13 Delhi VAT Act as on 5" March 2014 CHAPTER III Special Regimes 13 Priority Rule: Nil Form: Nil Where a provision in this Chapter is inconsistent with a provision in Chapter II, the provision in this Chapter shall, to the extent of the inconsistency, prevail. 14 Treatment of stock brought forward during transition | Rules: 8, 30 Form: 18 | (1) Within a period of four months of the commencement of this Act, all registered dealers wishing to claim the credit referred to in sub-section (2) of this section, shall furnish to the Commissioner a statement of their trading stock, raw materials and packaging materials for trading stock (in this section referred to as “opening stock”) which — (a) is held in Delhi on the date of the commencement of this Act; (b) was purchased by the dealer after the first day of April 2004; in such form as may be prescribed. (2) If- (a) the dealer has furnished the statement referred to in sub-section (1) of this section; (b) the opening stock has borne tax under the Delhi Sales Tax Act, 1975 (43 of 1975) at the point specified by the Government under section 5 of the said Act; and (c) the opening stock has been purchased by the dealer from a registered dealer for such purposes as are specified in sub-section (1) of section 9 of this Act; the amount of tax borne under the Delhi Sales Tax Act, 1975 (43 of 1975) on such opening stock, determined in such manner and subject to such conditions and restrictions and up to the extent as may be prescribed, shall be credited to the registered dealer as a tax credit under section 9 of this Act: PROVIDED that no tax credit under this section shall be allowed unless the dealer has in his possession, invoices issued by a dealer registered under the Delhi Sales Tax Act, 1975 (43 of 1975) in respect of the purchases of the said goods: PROVIDED FURTHER that the dealer shall claim the entire amount of credit to which he is entitled in a single statement, which accompanies a return furnished under this Act. (3) For the avoidance of doubt, no tax credit under sub-section (2) of this section can be claimed — (1) Delhi VAT Act as on 5" March 2014 Sec. 15 (a) for finished goods manufactured out of tax paid raw material or capital goods; (b) for any goods that were taxable at last point under the Delhi Sales Tax Act, 1975 (43 of 1975) held at the time of the commencement of this Act; (c) ima statement furnished more than four months after the commencement of this Act; or (d) for opening stock which is held outside Delhi. 'I(4) Every dealer wishing to claim a tax credit in excess of one lakh rupees on opening stock shall furnish with the statement a certificate signed by an accountant in the prescribed form certifying that the net credit claim made is true and correct. 2 [eR] 15 Second-hand goods | Rules: 7B, 9 | Form: Nil (1) This section applies where — (a) aregistered dealer sells second-hand goods; (b) the registered dealer has purchased goods from a resident seller who was not registered under this Act; *T(c) the goods were purchased either as trading stock for re-sale in an unmodified form or otherwise or as raw material for incorporation or division into trading stock; ] (d) the registered dealer will be liable to tax under section 3 of this Act on the sale of the goods or the goods into which they were incorporated, as the case may be; and (e) the registered dealer has adequate proof of the amount paid for the goods. (2) In the circumstances mentioned in sub-section (1) of this section, the registered dealer shall be entitled to a tax credit for the purposes of section 9 of this Act of the least of — (a) the input tax borne by the resident seller when he purchased the goods; (b) the tax fraction of the original cost of the goods to the resident seller; (c) the tax fraction of the fair market value of the goods at the time of their purchase by the registered dealer; or (d) the tax fraction of the consideration paid by the registered dealer for the goods. ' Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Sub-sections (5) & (6) of Section 14 omitted vide DVAT (Amendment) Act, 2005; No. F,14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 01.04.2005, retrospectively, earlier read as, “(c) the goods were purchased either as trading stock for re-sale in an unmodified form, or as raw materials for incorporation or division into trading stock;”. (2) Sec. 16 Delhi VAT Act as on 5" March 2014 ' [Explanation I.- For the purpose of this sub-section, the words “input tax borne” means the tax paid by the resident seller under the Delhi Sales Tax Act, 1975 (Act 43 of 1975) or under this Act and the word “tax fraction” shall be construed accordingly. Explanation II.- This section shall apply only if the resident seller had purchased goods in Delhi. ] (3) Where the amount paid by the registered dealer for the goods exceeds two thousand rupees, the tax credit shall be allowed in the tax period when the goods are sold by the registered dealer or the goods into which they have been incorporated are sold by the registered dealer. 16 Composition scheme for specified dealers Rule: 5 Forms: 01 to 03A Notification no. 180, dt. 28.02.2013 — Works Contractors Notification no. 1518, dt. 17.03.2006 — Medicine Traders Notification no. 1599, dt. 21.04.2006 — Bullion Traders (1) Notwithstanding anything contained “Ito the contrary] in this Act, every dealer whose — (a) turnover in the year preceding the commencement of this Act; or (b) turnover in the current year, See] does not exceed “fifty lakh] rupees or such other amount as may be specified by the Government by notification in the official Gazette, shall have an option to pay tax under this section: PROVIDED that this *[sub-section] shall not apply to dealers procuring goods from any place outside Delhi or selling or supplying goods to any place outside Delhi at any time during the year in which he opts to pay tax under this ‘Tsub-section] or if he is registered [in Delhi] under the Central Sales Tax Act, 1956 (74 of 1956). ' Inserted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 01.04.2005, retrospectively. * Inserted vide No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Omitted the words “exceeds the taxable quantum under this Act, but” vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. * Substituted for the words, “twenty five lakh” vide DVAT (Amendment) Act, 2005; No. F,14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. > Substituted for the word “section” vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. ° Substituted for the word “section” vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. 7 Inserted vide No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (3) Delhi VAT Act as on 5" March 2014 Sec. 16 'TPROVIDED FURTHER that in case the Government has notified a composition scheme for a class of dealers under sub-section (12) of this Section, such dealers shall not have an option to pay tax under this sub-section. ] (2) At the time of making application for registration under section 19 of this Act, the dealer covered under sub-section (1) shall be required to specify if he intends to pay tax under this section: PROVIDED that once the dealer chooses to pay tax under this section, the option may be reversed only after the end of the year for which the option is made, by appli- cation to the Commissioner within such time and in such manner as may be prescribed: PROVIDED FURTHER that where a dealer chooses to reverse his option to pay tax under this section, he shall be eligible to claim credit of the tax paid under this Act on the trading stock, raw material and packaging material held by him in Delhi on the date when such reversal takes effect subject to the conditions contained in section 20 of this Act in so far as they are applicable. (3) Incase a person who *Telects] to pay tax under this section - (a) who is registered under the Delhi Sales Tax Act, 1975 (43 of 1975) or the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) *[or the Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002),] at the time of the commencement of this Act; and (b) whose turnover in the year preceding the commencement of this Act APR] does not exceed ° [fifty lakh] rupees or such other amount as may be specified by the Government by notification in the official Gazette, he shall be required to specify the “[election] to pay tax under this section within such time and in such manner as may be prescribed. (4) Where a dealer ‘[elects] to pay tax under this section, the dealer’s net tax shall be the amount determined at the rate of one paisa in the rupee of the turnover of the dealer. ' Inserted vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. * Substituted for the word “intends” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Omitted the words “exceeds the taxable quantum under this Act, but” vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. > Substituted for the words “twenty five lakh” vide DVAT (Amendment) Act, 2005; No. F,14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. ° Substituted for the word “intention” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. ’ Substituted for the word “chooses” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (4) Sec. 16 Delhi VAT Act as on 5" March 2014 (5) A dealer who elects to pay tax under this section shall - '[(a) not purchase goods from a person who is not registered under this Act: PROVIDED that this restriction shall not apply for the purchase of goods from an un-registered dealer dealing exclusively in goods mentioned in the First Schedule; ] *T(b)] not compute his net tax under section 11 of this Act; Tc] not be allowed to claim credit under section 9, section 14 and section 15 of this Act; *T(d)] not be entitled to issue tax invoice; Te] not be allowed to collect any amount by way of tax under this Act; and T(f)] continue to retain tax invoices and retail invoices for all of his purchases as required under section 48 of this Act. (6) Incase a person - (a) who is registered under the Delhi Sales Tax Act, 1975 (43 of 1975) or the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) Tor the Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002),] at the time of the commencement of this Act; (b) whose turnover in the year preceding the commencement of this Act Spee] does not exceed fifty lakh] rupees or such other amount as may be specified by the Government by notification in the official Gazette; and (c) who has opted to pay tax under this section in terms of sub-section (3) of this section, he shall be required to pay tax on the trading stock, raw material, packaging material (in this sub-section referred to as “opening stock”) and finished ' Substituted vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005, earlier read as, “(a) not purchase goods from a person who is not registered under this Act;”. * Re-lettered from “(a)” to “(b)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Re-lettered from “(b)” to “(c)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Re-lettered from “(c)” to “(d)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. > Re-lettered from “(d)” to “(e)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. ° Re-lettered from “(e)” to “(f)” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA- 2005/112, dated 28.03.2005 w.e.f. 01.04.2005. 7 Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Omitted the words “exceeds the taxable quantum under this Act, but” vide DVAT (Second Amendment) Act, 2005; No. F.14(29)/LA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. ” Substituted for the words “twenty five lakh” vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (5) Delhi VAT Act as on 5" March 2014 Sec. 16 goods held on the date of the commencement of this Act at the rates specified in section 4 of this Act on the fair market value of such opening stock and finished goods where such opening stock and finished goods have not borne tax under the Delhi Sales Tax Act, 1975 (43 of 1975). (7) The tax due under sub-section (6) of this section shall be paid at any time before the person specifies his intention to pay tax under this section. (8) The proof of payment of tax referred to in sub-section (6) of this section along with a statement of opening stock and finished goods in such form as may be prescribed shall be furnished to the Commissioner at the time the person specifies his intention to pay tax under this section. (9) Subject to the other provisions of this section, where a registered dealer pays tax at the rates specified in section 4 of this Act, he may choose to pay tax under this section only from the beginning of the following year: PROVIDED that such registered dealer shall be required to pay tax at the rates specified in section 4 of this Act on the trading stock, raw material, packaging material and finished goods held by him on the first day of the said following year. '[(10) If the turnover of a dealer who elects to pay tax under this section exceeds fifty lakh rupees or such other amount as may be specified by the Government by notification in the official Gazette, he shall be liable to pay tax under section 3 of this Act on and from the day his taxable turnover exceeds fifty lakh rupees or such other amount as may be specified by the Government by notification in the official Gazette and shall be entitled to claim credit of the input tax paid under this Act on trading stock, raw material and packaging material held by him in Delhi on such day: PROVIDED that such dealer has intimated the Commissioner within seven days of his becoming liable to pay tax under section 3 of this Act in the prescribed form and has furnished such other information to the Commissioner as may be prescribed. (11) The Commissioner may notify a dealer or a class of dealers who shall not be entitled to opt for payment of tax under this section. ] *[(12) Notwithstanding anything to the contrary contained in this Act, the Government may - (a) by notification in the official Gazette, notify schemes of composition, subject to such conditions and restrictions as may be specified therein, of tax payable by a class of dealers or classes of dealers and different types of schemes may be notified for different classes of dealers; (b) specify, im any scheme of composition of tax payable by the class of dealers or classes of dealers, different rates of taxes for different class or classes of dealers but, in such scheme, the net tax liability of the dealer opting to pay tax thereunder shall not exceed eight paise in the rupee of the turnover of the dealer. ] ' Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. * Inserted vide DVAT (Second Amendment) Act, 2005; No.F.14(29VLA/2005/333, dated 16.11.2005 w.e.f. 16.11.2005. (6) Sec. l16A Delhi VAT Act as on 5" March 2014 ‘116A Special provisions relating to casual traders |Rule: 5A Forms: 04A, 06A, 16A (1) Notwithstanding anything contained to the contrary in this Act, a casual trader shall - (a) at least three days before commencing business in Delhi, inform the Commissioner of such particulars of his business in such form and manner as may be prescribed; (b) deposit security in cash or in the form of bank draft as may be fixed by the Commissioner which shall not exceed estimated liability to pay tax for seven days or such lesser period for which the casual trader is conducting the business in Delhi; (c) pay tax daily on the sales made during the previous day; (d) furnish to the Commissioner, immediately after conclusion of his business in Delhi, a return in the prescribed form and manner; and (e) not issue any tax invoice. (2) The Commissioner shall, after verification of information furnished to him under clause (a) of sub-section (1) and after getting security under clause (b) of that sub-section, shall register the casual trader. (3) Upon registration of casual trader, the Commissioner may issue the required forms to him for use as the declaration referred to in sub-section (2A) of section 61 of this Act for bringing goods for sale in Delhi and for taking the unsold goods out of Delhi and the casual trader shall render complete account of the used forms and surrender the unused forms alongwith the return referred to in clause (d) of sub-section (1). (4) The Commissioner shall, after examination of the return furnished by the casual trader under clause (d) of sub-section (1), the forms referred to in sub-section (3) and the accounts maintained by him including the retail invoices issued, assess him to tax within five days and shall serve upon him a notice of assessment and after adjusting any tax and any other dues payable under this Act, refund the balance amount of security to him in case security is deposited in the form of cash deposit. (5) The casual trader shall pay immediately the amount mentioned in the notice of assessment. (6) On being satisfied that the amount due has been paid, the Commissioner shall release the security or balance security, as the case may be. (7) Notwithstanding anything contained in this Act the taxable quantum in respect of a casual trader shall be nil.] ' Section 16A inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (7) Delhi VAT Act as on 5" March 2014 Sec. 17 17 Transactions between related parties |Rule: Nil Form: Nil If — (a) aregistered dealer sells or gives goods to a related person; (b) the terms or conditions of the transaction have been influenced by the relationship; and (c) the related person had purchased the goods, the related person would not be entitled to a tax credit for the purchase, or the amount of the tax credit would be reduced under sub-section (3) of section 9 of this Act; the transaction shall be deemed to be a sale made by the registered dealer and the sale price of the goods shall be deemed to be their fair market value. (8) Sec. 18 Delhi VAT Act as on 5" March 2014 CHAPTER IV Registration and Security 18 Mandatory and voluntary registration |Rule: Nil Form: Nil (1) Every dealer is required to apply for registration under this Act if - (a) the dealer’s turnover in the year preceding the commencement of this Act exceeded the taxable quantum; or (b) the dealer’s turnover in the current year exceeds the taxable quantum; or (c) the dealer is liable to pay tax, or is registered or required to be registered under Central Sales Tax Act, 1956 (74 of 1956): PROVIDED that a dealer dealing exclusively in goods mentioned in the First Schedule shall not be required to register. Explanation.- For the purposes of this section, in case of dealers involved in execution of works contracts, the taxable quantum shall be calculated with reference to the total contract amount received. (2) For the purposes of this Act, “taxable quantum” of a dealer shall be 'Ttwenty] lakh rupees, or such other amount as may be specified by the Government by notification in the official Gazette: PROVIDED that a dealer who imports for sale any goods into Delhi, the taxable quantum shall be “Nil” or such other amount as may be specified by the Government by notification in the official Gazette. (3) The taxable quantum of a dealer shall not include turnover from- (a) _ sales of capital assets; (b) sales made in the course of winding up the dealer’s activities; and (c) sales made as part of the permanent diminution of the dealer’s activities. (4) Any person who is not required by sub-section (1) to be registered but who - (a) is adealer; or (b) intends from a particular date to undertake activities which would make him a dealer, may apply for registration. — Substituted for the word “ten” vide Notification No. F.14(4)/LA-2013/cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013. Earlier substituted for the word “five” vide No. F.101(316)/2005-Fin(A/Cs)()/17, dated 01.04.2005 w.e.f. 01.04.2005. (1) Delhi VAT Act as on 5" March 2014 Sec. 19 19 Registration | Rules: 11 to 14,22(1) |\Forms: 04 to 06 (1) An application for registration shall be made in the prescribed form, within such time, containing such particulars and information and accompanied by such fee, security and other documents as may be prescribed. Explanation.- The Commissioner may, by order to be published in the official Gazette, specify certain classes of persons who may not be required to furnish a security. (2) Where — (a) an applicant furnishes a security in the prescribed form and for the prescribed amount, and (b) all other forms and evidence required by and prescribed under this Act are complete and in order, the Commissioner shall register the applicant. (3) Where the Commissioner has not registered the person within fifteen days from the date on which the application is made, the Commissioner shall, after conducting such inquiries as he deems fit, either— (a) register the person forthwith as a registered dealer; or (b) issue a notice to the applicant, clearly stating the grounds on which his application is proposed to be rejected and permitting him to show cause in writing, within fifteen further days, why his application should not be rejected: PROVIDED that where the Commissioner has not registered the person or issued a notice by the required date, the applicant shall be deemed to be registered for the purposes of this Act, and the Commissioner shall issue a certificate of registration to such person. (4) Where, pursuant to clause (b) of sub-section (3) of this section, the applicant furnishes a reply to the notice, the Commissioner may, either accept the application and register the person, or reject the application for reasons to be recorded in writing. (5) If the applicant fails to respond to the notice issued under clause (b) of sub- section (3) of this section within the stipulated time, the application for registration shall stand rejected. (6) Where a registered dealer has furnished a security as a condition of registration, such security shall be required for the continuance in effect of registration, unless otherwise provided by the Commissioner. Explanation.- The decision of the Commissioner not to register a person may be the subject of an objection under section 74 of this Act. (2) Sec. 20 Delhi VAT Act as on 5" March 2014 20 Effect of registration |Rule: 10 Form: 19 (1) ‘If at the time at which an unregistered dealer’s registration takes effect after the commencement of this Act and — (a) the dealer holds trading stock for the purpose of sale, or for use as raw materials for the production of ' [finished goods]; (b) the dealer has borne input tax on the purchase of the trading stock or raw materials; (c) the dealer furnishes a statement of its trading stock and raw materials in the prescribed form to the Commissioner; and (d) the dealer holds adequate proof of the amount of input tax in respect of the purchases; the dealer shall be entitled to a tax credit for the trading stock or raw materials held by the dealer on the date that the dealer’s registration takes effect; PROVIDED that the dealer must claim the entire amount of tax credit to which he is entitled in a single claim, which accompanies the first return furnished by the dealer under this Act. Explanation I.- This section applies where goods have borne tax imposed after the commencement of this Act; Explanation II.- Section 14 deals with goods which have borne sales tax prior to the commencement of this Act. (2) For the purposes of sub-section (3) of section 9 of this Act, the amount of the tax credit shall be the least of - (a) the amount of input tax disclosed in the proof referred to in clause (d) of sub-section (1) of this section; (b) — the tax fraction of the cost of the goods; (c) the tax fraction of the fair market value of the goods at the time of registration; or (d) such amount as may be prescribed. (3) Where the registered dealer accounts for turnover on the basis of amounts received and amounts paid, he shall exclude from his turnover - (a) any amount received after he is registered in respect of sales made while he was unregistered; and (b) any amount paid after he is registered in respect of purchases made while he was unregistered. ' Substituted for the words “trading stock” vide DVAT (Amendment) Act, 2005; No. F,14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. (3) Delhi VAT Act as on 5" March 2014 Sec. 21 21 Amendment of registration |Rule: 15 Forms: 07, 08 (1) A registered dealer shall inform the Commissioner in the prescribed manner within one month, if he - (a) _ sells or otherwise disposes of his business or any part of his business or any place of business, or effects or comes to know of any other change in the ownership of the business; or (b) discontinues his business or changes his place of business or warehouse, or opens a new place of business, or closes the business for a period of more than one month; or (c) changes the name, style, constitution or nature of his business; or (d) enters into partnership or other association in regard to his business or adds, deletes or changes the particulars of the persons having interest in business; and if any such registered dealer dies, his legal representative shall, in like manner, inform the said authority. (2) The Commissioner may, after considering any information furnished under this Act or otherwise received and after making such inquiry as he may deem fit, amend from time to time any registration. (3) An amendment of the registration made under sub-section (2) shall take effect from the date of contingency which necessitates the amendment whether or not information in that behalf is furnished within the time prescribed under sub-section (1) of this section. (4) Any amendment of a registration under this section shall be without prejudice to any liability for tax or penalty imposable or for any prosecution for an offence under this Act. (5) For the removal of doubts it is hereby declared that where a registered dealer - (a) effects a change to the nature of the goods ordinarily sold; (b) is a firm and there is a change in the constitution of the firm without dissolution thereof; or (c) is atrustee of a trust and there is a change in the trustees thereof; or (d) is a Hindu undivided family and the business of such family is converted into a partnership business with all or any of the members of the family as partners thereof; or (e) isa firm ora company or a trust or other organisation, and a change occurs in the management of the organisation, then, merely by reason of the circumstances aforesaid, it shall not be necessary for the registered dealer to apply for a fresh certificate of registration and on information being furnished the registration shall be amended. (4) Sec. 22 Delhi VAT Act as on 5" March 2014 22 Cancellation of registration | Rules: 16, 17 Forms: 09 to 11 (1) Where —- (a) aregistered dealer who is required to furnish security under the provisions of this Act has failed to furnish or maintain such security; (b) aregistered dealer has ceased to carry on any activity which would entitle him to be registered as a dealer under this Act; (c) an incorporated body is closed down or otherwise ceases to exist; (d) the owner of a proprietorship business dies leaving no successor to carry on the business; (ce) inthe case of a firm or association of persons, it is dissolved; (f) registered dealer has ceased to be liable to pay tax under this Act; (g) a registered dealer knowingly furnishes a return which is misleading or deceptive in a material particular; (h) aregistered dealer has committed one or more offences or contravened the provisions of this Act and the offence or contravention is, in the opinion of the Commissioner, of such magnitude that it is necessary to do so; or (i) | the Commissioner, after conducting proper inquiries, is of the view that it is necessary to do so; the Commissioner may, after service of a notice in the prescribed form and after providing the dealer an opportunity of being heard, cancel the registration of the dealer with effect from the date specified by him in the notice. (2) Where — (a) aregistered dealer has ceased to carry on any activity which would entitle him to be registered as a dealer under this Act; (b) an incorporated body is closed down or otherwise ceases to exist; (c) the owner of a proprietorship business dies leaving no successor to carry on business; (d) inthe case of a firm or association of persons, it is dissolved; or (e) aregistered dealer has ceased to be liable to pay tax under this Act; the registered dealer or the dealer’s legal representative in case of clause (c) above, shall apply for cancellation of his registration to the Commissioner in the manner and within the time prescribed. Explanation.- For the purpose of this sub-section “legal representative” has the meaning assigned to it in clause (11) of section 2 of the code of Civil Procedure, 1908 (5 of 1908). (3) On receipt of such application, if the Commissioner is satisfied that the dealer has ceased to be entitled to be registered, he may cancel the registration. (5) Delhi VAT Act as on 5" March 2014 Sec. 23 (4) Ifa registered dealer ceases to be registered, the Commissioner shall cancel the dealer’s registration with effect from a specified date. (5) If a dealer’s registration which has been cancelled under this section is reinstated as a result of an appeal or other proceeding under this Act, the registration of the dealer shall be restored and he shall be liable to pay tax as if his registration had never been cancelled. (6) If any registered dealer whose registration has been restored under sub- section (5) of this Act satisfies the Commissioner that excess tax has been paid by him during the period his registration was inoperative which but for the cancellation of his registration he would not have paid, then the amount of such tax shall be adjusted or refunded in such manner as may be prescribed. (7) Every registered dealer who applies for cancellation of his registration shall surrender with his application the certificate of registration granted to him and every registered dealer whose registration is cancelled otherwise than on the basis of his application shall surrender the certificate of registration within seven days of the date of communication to him of the cancellation. 'T(8) The Commissioner shall, at intervals not exceeding three months, host on the departmental website, such particulars as may be prescribed, of registered dealers whose registration has been cancelled. ] (9) The cancellation of registration shall not affect the liability of any person to pay tax due for any period and unpaid as on the date of such cancellation or which is assessed thereafter notwithstanding that he is not otherwise liable to pay tax under this Act. 23 Effect of de-registration |Rule: Nil Form: Nil (1) Every person whose registration is cancelled shall pay in respect of all goods held on the date of cancellation an amount equal to the higher of — (a) the tax that would be payable in respect of those goods if the goods were sold at their fair market value on that date; or (b) the tax credit previously claimed in respect of those goods. (2) Where the dealer has accounted for turnover on the basis of amounts received and amounts paid, he shall include in the turnover of his final return - (a) any amount not yet received in respect of sales made while he was registered; and (b) any amount not yet paid in respect of purchases made while he was registered. ' Substituted for the words, “(8) The Commissioner shall, at intervals not exceeding three months, publish in the official Gazette such particulars as may be prescribed, of registered dealers whose registration has been cancelled.”, vide Notification No. F.14(4)/LA-2013/ cons2law/11, dated 28.3.2013 read with No.3(17)/Fin.(Rev.-1)/2012-13/dsvi/263; dated 30.3.2013 w.e.f. 1.4.2013.