Delhi Value Added Tax - Part 7 - Assessment and Audit
November, 01st 2010
This part deals with assessment and audit.
An assessment is a procedure by which your tax payable is determined either by you or by us.
When are You Assessed
You may assess yourself by submitting proper returns within proper dates. If you fail to do so we will assess you accordingly. The methods of assessment are explained below:
When you compute your tax liability for a particular period and submit a correct and complete return (Form DVAT-16) within the due date to the Commissioner, it is treated as if an assessment has been issued to you by the Commissioner. This is known as self-assessment.
If you do not self-assess your tax and file a proper return, the Commissioner will assess you for that particular tax period. This process is known as default assessment.
We will not accept a self-assessment of your tax liability, and will proceed for a default assessment, if your return:
Is not submitted;
Is incomplete or incorrect; or
Does not comply with the requirements of the law.
Under default assessment, we will assess or re-assess you for the amount of net tax due for the given tax period. We will send you a notice (in Form DVAT-24), telling you clearly the amount of any tax due for that tax period.
Any additional tax indicated in the assessment notice that you receive is due and payable on the same date as the date on which the net tax for the tax period was due.
Assessment of CST
Although the CST liability is reported and paid on either a monthly or quarterly basis, the assessment of CST is done on an annual basis. When you submit your monthly or quarterly CST return, you are not making a self-assessment of your CST liability. You must, however, report and pay your CST liability on a monthly or quarterly basis, as required.
Your self-assessment for CST arises when you submit your Annual Reconciliation Statement which must be filed within nine months from the end of the financial year, i.e., by 31st December.
While submitting your annual statement, you must ensure that you submit all the statutory declaration forms, in support of any concessional rate or exemption from CST that you had claimed in your monthly or quarterly returns for the year.
If you do not submit your statutory declaration forms (relevant under the CST Act) along with your annual statement, we will default assess you and disallow any claims of concessional rate or exemption from CST.
Limitation on Assessment and Re-assessment
No assessment or reassessment can be made by us after the end of four years from the earlier of:
The date of furnishing a return; or
The date on which the Commissioner made an assessment of tax for the tax period.
Interest on Additional Tax Owed
Interest is payable on the delayed payment of any additional amounts of tax that are owed under an assessment notice. Interest becomes payable from the due date of such additional amounts of assessed tax.
We may audit your business affairs for which we will issue a notice in Form DVAT-37. This would involve checking the DVAT Returns filed against your records and other information.
You must keep all financial records relating to your DVAT liability for 7 years after conclusion of the events or transactions which they record. During the audit, you are required to extend cooperation to the audit team and furnish the required documents.
Notwithstanding any other audit under any other provisions of the Act, the department under certain circumstances may ask a dealer to get its business affairs or accounts audited by an accountant or a panel of accountants/experts. Such an audit would need to be completed within 180 days of the issuance of direction to that effect. The fee for such an examination, that may be determined by the department, would be borne by the dealer