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February, 17th 2014
                                           HIGHLIGHTS & FAQs

                                                Abbreviations used:
       (i)        DSC (or) Scheme : Delhi Tax Compliance Achievement Scheme/Voluntary VAT Amnesty
       (ii)       DVATAct : Delhi Value Added Tax Act, 2004
       (iii)      CSTAct : Central Sales Tax Act, 1956
       (iv)       DSTAct: Delhi Sales Tax Act, 1975
       (v)        WCTAct : Delhi Sales Tax on Works Contract Act, 1999
       (vi)       RTUAct: Delhi Sales Tax on Right to Use Goods Act, 2002
       (vii)      ETAct : Delhi Tax on Entry of Motor Vehicles into Local areas Act, 1994
       (viii)     VATO : Value Added Tax Officer and Sales Tax Officer
Notes - In this Paper -:
  1.           In this Paper,\\\"Notice of Assessment/Penalty\\\" under the DVAT Act has been considered and
               titled as \\\"Assessment Order\\\"; and Objection as \\\"Appeal\\\".
  2.           In this paper, the term \\\"declared tax\\\" means amount disclosed/surrendered and amount
               settled (where assessment order has been issued) under this Scheme. The term \\\"declarant\\\"
               means the person, who has declared tax.

                             OBJECTIVE AND SCOPE OF THE SCHEME

A. Improve Self-Compliances:
         Where assessment order has NOT been issued, the declarant (including trader, manufacturer,
contractor, builder, leasing company, etc.) shall pay only declared tax(for the period upto 31.03.2013);
and get immunity from interest, penalty and prosecution. Circumstances, such as,-
       (i)      Dealer failed to obtain registration and pay tax;
       (ii)     Rate of tax has been wrongly charged by the selling dealer;
       (iii)    Sale has not been disclosed/under-disclosed in the DVAT / CST Act
       (iv)     Input tax credit (ITC) has wrongly been claimed by the purchasing dealer;
       (v)      Credit Note/Debit Note, including bulk discounts, have not been accounted for.
       (vi)     Central sale has been stated as local sale or vice a versa, resulting in tax deficiency;
       (vii) In case of central sales against Form C or other declaration forms, the declarant is not
             expecting central declaration forms from purchasing dealers;
       (viii) Matter is pending in assessment, audit or special audit and the assessment order has not
              been framed by VATO;
      (ix)     Goods, paper and other accounts are seized by enforcement team, in inspection, survey,
               search or seizure, carried before 31.3.2013 or for period upto 31.03.2013, where the
               declarant expects some tax deficiency;
      (x)      TDS has not been deducted u/s 36A of the DVAT Act;

B. Disputes Settlement

  ·          Where theassessment order has been issued by the Department, the declarant shall pay tax
             and interest as stated in such order/notice.
  ·          The order must pertain to a period before and up to 31.3.2013, and tax has not been paid up
             to 31.8.2013.
  ·          The assessment order might be issued under the DVAT Act, CST Act, DST Act, WC Act, RTU
             Act, or ET Act.
  ·          The dispute may or may not be pending before any higher forum including the DVAT
             Tribunal or the High Court or the Supreme Court.
  ·          The declarant is eligible even if no appeal has been filed against that order so far.
  ·          The declarant will get immunity from payment of interest from the date of order till the
             date of declaration, penalty and prosecution under the Act.

                                  IMPORTANT DATES & PERIODS

12.09.2013              Enactment of section 107 of the DVAT Act empowering the Government to
                        introduce this Scheme
20.09.2013              Date of Notification of the Scheme and its coming it into force
Up to 31.03.2013 Eligibility: Period for which tax dues might be declared or paid
31.08.2013              Eligibility: Tax dues up to 31.3.2103 has not been paid or only partly paid by
31.01.2014              Last date of payment of at least 50% of declared tax and filing of declaration
                        in Form DSC-1 under this Scheme
21.03.2014              Last date of payment of remaining amount of declared tax, if any

                                   COMPUTATION OF TAX DUES

 S.N.               Nature of Tax Dues                           Procedure of Calculation
  1          Other than Works Contractors:             Commodity wise taxable turnover in the tax
             Dealers, whether registered or         period in respect of which declaration to be made
             not, under the DVAT Act or the CST                             (X)
             Act on whom assessment order has
                                                         Rate of tax applicable for that tax period
             not been served by VATO
S.N.                Nature of Tax Dues                         Procedure of Calculation
 2          Works      Contractors: Dealers,       (a) Works contractors engaged in construction,
            whether registered or not, under           of complex, building, etc., for sale to a buyer
            the DVAT Act or the CST Act on             before construction is complete, where
            whom assessment order has been             value of land is included in total
            served or not.                             consideration: @1% of total consideration
                                                       (including labour& services);
                                                   (b) Other works contractors, including the
                                                       dealers stated at Sl. No. (a), who opt to
                                                       exclude the value of land as per Rule 3 of the
                                                       DVAT Rules;@ 3% of total turnover (including
                                                       value of labour and services).
 3          Dealers registered under the DVAT        As stated at Sl. No. 1 or 2, as the case may be
            Act or the CST Act on whom
            assessment order has been served
            on certain issues, but declaring tax
            dues on different issues
 4          Dealers     other     than    work     Aggregate of amount of tax and interest stated in
            contractors, registered under the       the assessment order (exclude penalty, if any)
            DVAT Act, CST Act DST Act, WC Act,                           (less)
            RTU Act or ET Act on whom
                                                    Amount already paid by the dealer towards the
            assessment order has been served
                                                                   said demand.
 5          Persons required to deduct tax at       3% of total sum paid or credited by the person
            source u/s 36A of the DVAT Act         for discharge of any liability for the execution of
            (TDS)                                  works contract or the amount actually deducted,
                                                                  whichever is greater
                                                   Amount already deposited towards such discharge

        Manner of calculation of tax dues by the works contractor, being the builders:
        Transactions of builders may be divided in two parts: -
     (i)      Activity carried by the builder for the land owner, that is, determination of value of
              works contract for the land-owner where consideration has been received by the builder
              in the form of land : Here the value of land shall be determined as per newly inserted
              Rule 3(1A) of the DVAT Rules;
     (ii)     Activity carried on by the builder for the intended buyer (booking of property/unit before
              completion of construction by the builder): Builder has two options, namely -
              (a)   Pay tax @1% of total consideration, including the value of land, receivable/ received
                    from the intended buyer; or
              (b)   Pay tax @ 3% of total turnover (including value of labour and services) as reduced by
                    the value of land determined in accordance with the recently amended Rule 3(3) & (4)
                    of the DVAT Rules.
        The Government has amended Rule 3 of the DVAT Rules vide Notification No. F.3(16)Fin(Rev-
        I)/2013-14/ds VI/785 effective from 20.09.2013. This Rule facilitates the works contractor to
        determine his taxable turnover.
      Adjustment of input tax credit from declared tax dues
      The input tax credit cannot be adjusted against payment of tax dues under VVAS. Accordingly,
      entire tax dues under the Scheme shall be paid in cashthrough the normal e-payment method.
      Adjustment of `excess tax credit\\\' or `carry forward amount\\\' from declared tax dues
      There are no provisions for such adjustment and, thus, entire amount shall be paid by the
      declarant in cash. He shall not be entitled to adjust his carry forward amount as per the
      Returns, if any. For example, a declarant, who has carry forward amount of Rs. 10 lacs as on
      the date of declaration, declares the amount of tax dues of Rs.12 lacs under this Scheme. In
      such a case, he shall pay entire Rs.12 lacs in cash, without adjusting the carry forward amount
      of Rs.10 lacs.


1.      Compute the amount of tax dues in accordance with preceding Paras;
2.      If not registered under the DVAT Act (either as a dealer with TIN allotment or as a
        TDSdeductor with TAN allotment), obtain registration. Also pay tax and file returns for the
        period after 1.4.2013 along with the declaration in DSC-1;
3.      Where declaration is made in relation to the tax dues against which objection/appeal/ revision
        is pending before the higher forum, then-
      i.    all statutory appeals/revisions pending before quasi-judicial forums up to the stage of
            Tribunal shall be deemed to have been withdrawn once the Scheme is opted for;
      ii.   all matters pending in the High Court and Supreme Court shall be withdrawn by the
            declarant, and the declarant shall submit the copy of the application filed before the Court
            for withdrawal along with FormDSC-1;
4.      Fill the declaration in Form DSC-1 on the web-site of the Department;
5.      Pay at least 50% of amount of declared tax dues through Challanonline. It may be noted
        that declarant may pay even the entire amount of tax dues at this stage;
6.      File hard copy of Form DSC-1 along with Challan to the designated authority on or before
7.      The designated authority shall suo-moto issue the acknowledgement in Form DSC-2 within a
        period of 15 working days from the date of receipt of the declaration. If it is not received,
        then designated authority may be contacted;
8.      Pay remaining (unpaid) amount of tax dues through Challanonline on or before the
9.      Submit proof of such payment along with a copy of acknowledgement in DSC-2 (already
        received at Step No. 7) to the designated authority;
10.     Obtain Form DSC-3 from the designated authority: On furnishing the details of full payment
        of declared tax dues, the designated authority shall issue an acknowledgement of discharge
        of such dues within 15 days in Form DSC-3;
11.     A declaration made under this Scheme shall become conclusive upon issuance of Form
        DSC-3by the designated authority.
12.     Amount paid under this Scheme will not be refunded under any circumstances;
 13.   If fails to pay the tax dues, either fully or in part, after making declaration, such balance dues
       along with interest thereon shall be recovered under the provisions of DVAT Act.

                          IMMUNITIES UNDER THE SCHEME

A. Immunities, where assessment order has NOT been issued:

 ·     Immunity from interest in relation to declared tax
 ·     Immunity from penalty in relation to declared tax
 ·     Immunity from prosecution
 ·     Immunity from any other proceedings in relation to declared tax
 ·     If not already registered under the Act:-
       ­   Immunity from penalty of late registration
       ­   Immunity from interest for late payment of taxfor the period after 1.4.2013
       ­   Immunity for late filing of returns for the period after 1.4.2013
 ·     A declaration made under this Scheme shall become conclusive upon issuance of Form DSC-
       3, and no matter shall be reopened/reassessed/reviewed thereafter in any proceedings
       under this Scheme or the Act before any Authority or Court relating to the period covered
       by such declaration to the extent of tax dues declared by the declarant;
 ·     The information gathered vide a declaration under the Scheme shall be kept confidential,
       and shall not be used except under the Scheme and the same shall not be shared with any
       other person/ government department/ agency.

B. Immunities, where assessment order has been issued:

 ·     Immunity from interest in relation to declared tax for the period after issuance of
       assessment order till the date of declaration
 ·     Immunity from prosecution
 ·     Immunity from penalty or any other proceedings in relation to declared tax

C. No Immunities under this Scheme:

 ·     Interest stated in the assessment order
 ·     Interest and penalty not related to declared tax
 ·     Penalty which has no relation to tax deficiency stated in the penalty assessment order under
       Section 33. For example, where penalty has been imposed for late filing of Returns or other
       documents or for non-maintenance of stock records, etc, such cases would not be covered
       within the scope of VVAS.
                                    FALSE DECLARATION
         Where the Commissioner has reasons to believe that the declaration was false in material
particular, he may serve notice on the declarant, within one year from the date of declaration, in
respect of such declaration. He may require the declarant to show cause why he should not be
required to pay the tax dues unpaid or short-paid as per provisions of the Scheme.
         If the Commissioner is satisfied that the declaration made by the declarant was substantially
false, then benefit of this Scheme shall not available to the declarant. Such declarant may be
proceeded u/s 89(2) of the Act for furnishing of false declaration.


DSC/VVAS introduced by the Delhi Government is certainly an innovative and futuristic Scheme. It
would increase the number-base of the dealers registered with the DVAT Department; and help in
reducing existing disputes/litigations. Inspite of few issues already discussed, it is a welcome move.


  This paper is an attempt to answer the frequent queries in a simple language. However, for authentic
  legal interpretation please refer to the scheme Notified vide No. F.3(16)Fin(Rev-I)/2013-14/ds VI/786
                                              dated 20.09.2013
                                 FREQUENTLY ASKED QUESTIONS

Enforcement Survey
Q1.    What is the procedure for evaluating the amount to be paid wherein enforcement
       survey/seizure of goods/ papers have been made or where the notice of audit has been

A1.    If the dealer wants the estimated tax dues to be evaluated he may contact the helpdesk
       under supervision of Sh. S.K. Singh, Additional Commissioner (T & T). Tel. No. 011-23705434
       and Sh. Satnam Singh, Additional Commissioner(T & T) Tel No. 011-23311496;
       email - actt.amnesty.scheme

Q2a    In case of survey cases where default assessment is pending, and where advance cheque has
       been collected by the enforcement team at the time of survey and encashed; can such
       advance payment be adjusted from the amount of tax deficiency stated by the team in its
       report? If yes, where the amount of advance tax is more than the tax dues, can that excess
       payment be carry forward by the declarant and adjusted from his future tax liability?

A2a    In survey cases where any tax deficiency has been noticed and amount has been paid due to
       tax deficiency and / or penalty, the amount paid can be adjusted against tax due declared
       under Amnesty Scheme provided that no carry forward/refund of the balance amount left
       after adjustment, if any, will be admissible.

       However, where advance tax has been taken against future sales/ liability, the same can be
       adjusted against tax due declared under Amnesty Scheme and balance adjusted against
       future tax liability. Declarant shall file the relevant details along with the DSC-1.

Q2b    Also, what about the case where the dealer admits his tax liability and deposits the same
       within 3 days of the survey?

A2b    It would not be applicable since section 87(6) was inserted w.e.f. 1.4.2013; and the amnesty
       scheme covers the tax dues upto 31.3.2013.

Assessment/Audit/Special Audit
Q3     A demand say for example of Rs. 100/- (plus interest thereon) has been created as tax and
       interest against a dealer on account of mismatch in 2A / 2B of Rs. 20/- each, from 5
       purchasing dealers. Penalty of Rs. 100/- has also been imposed upon the dealer. Now 4
       selling dealers have corrected their details and the mismatch is now restricted to say Rs. 20/-
       even on the department\\\'s web-site for the same period. Can the dealer now pay Rs. 20/- and
       (proportionate interest thereon) under amnesty scheme and get immunity from penalty of
       Rs. 100/- imposed upon him?

A3     The dealer will have to file objection against the default assessment order. In such cases the
       objection hearing Authority will be requested to expedite the objection on priority. After
       reassessment order is passed, dealer can avail of Amnesty Scheme on the basis of
       reassessment order.
Q4   Since dealers can declare under the VVAS upto 31st January, 2014, whether assessment /
     audit / special audit / objection/ appeal / recovery proceedings of the Department will
     continue during the period of VVAS i.e. upto 31.01.2014 ?

A4   Yes. There is no guarantee that the dealer will opt for VVAS and hence, the Department will
     continue with assessment / audit / special audit / objection/ appeal / recovery proceedings
     in the normal course and if the proceedings all completed then the dealer will need to pay
     the assessed tax with interest. Hence, it is in the interest of the dealer to declare and avail
     the benefit under VVAS at the earliest and in any case on or before 31.01.2014.
Q5   Can VVAS be applied for part of the assessment order/notice of assessment?

A5   No. Under VVAS, the dealer would be required to pay the entire assessed tax and interest.
Q6   There are instances of more than one rate of tax for the same/similar goods depending on
     sale value or other differentiation. Can we get an illustrative list of goods with more than
     one rate of tax?
A6   To ascertain the rate of tax on goods, the dealers are advised to refer section 4, section 6
     and the Schedules appended to the Delhi Value Added Tax Act, 2004. An illustrative list of
     goods with more than one rate of tax is given below:-

     Sl. No.      Commodity                Rate of Tax                   Rate of Tax
     To ascertain the rate of tax on goods, the dealers are advised to refer section 4, section 6 and the Schedules a
     1.       Watches              Costing uptoRs. 5000 ­ Costing above Rs. 5000 ­
                                   12.5%                  20%
Q7   Where an Audit notice has been issued to the dealers; and the dealer wants to pay tax dues under VVAS, wha
     2.       Printers            Normal Printers - 5%           Multi-functional printers
A7   The dealer could estimate the deficit tax, which has led to ­ 12.5% of the audit notice, and
                                                                 issuance                         pay the same alo

     3.       Garments             Costing uptoRs. 5000 ­ Costing above Rs. 5000 ­
                                   5%                     12.5%

     4.       Foot wears           Costing uptoRs. 500 ­ Costing above Rs. 500 ­
                                   Exempt                12.5%

     5.       Hardware     and Hardware ­ 5%                    Sanitary fittings      and
              Sanitary Goods                                    goods ­ 12.5%

     6.       Paper & Board        Normal paper & board ­ Coated paper and board ­
                                   5%                     12.5%

     7.       Mobile phones        Costing uptoRs. 10000 ­ Costing above Rs. 10000 ­
                                   5%                      12.5%

     8.       Electric cables      Cables    having   cross     Industrial cables i.e.
                                   section area of the core     Cables    having     cross
                                   from 0.5 to 6.0 sq.          section area of the core
                                   millimeter ­ 12.5%           above 6.0 sq. millimeter ­
        same with DSC 1.

Q8      Can a dealer pay a single/ consolidated amount against his estimated tax dues in context of
        his tax dues for the multi-year audit or multi-year special audit ordered against it; or

A8      Yes, the declarant can pay tax dues through single challan and file one DSC-1 for the
        consolidated amount. However, the declarant shall furnish tax period wise details of tax
        dues along with DSC-1.

Default in furnishing of Returns

Q9      If a dealer has defaulted in filing of DVAT/CST returns for the tax period(s) upto 31st March
        2013 and has also not paid net tax as computed u/s 11 of the Act, what will be the
        procedure for applying under Amnesty Scheme and filing of returns? Will he get immunity
        from payment of penalty u/s 86(9) for late filing of the return?

A9      Such dealers have to file return for all the tax period(s) up to March 2013 in the return Form
        DVAT-16 and CST Form-I, if registered under CST Act also. The dealers will get immunity
        from payment of penalty, for late payment of tax and late filing of returns for the above said
        tax periods. The dealer shall pay the net tax as per Section 11 of the Act for all the tax
        periods in default, along with interest and file his return(s) for these tax period(s) in the
        manner specified in the Act and rules framed there under before filing declaration in Form
        DSC-1. Upon payment of entire amount of tax dues with interest and filing of all returns in
        default, he shall be eligible for immunity under this scheme from payment of penalties
        specified under section 86 of the Act, for late payment of tax and late filing of returns.\\\'


Q10     Where objection or Appeal has been partly allowed and case has been remanded, what
        would be the procedure for VVAS?

A10     The dealer will have to get the remanded case assessed and then avail benefit under the
        Scheme on the basis of revised order. He may contact the concerned Zonal Additional/ Joint
        Commissioner to get the remanded order passed at the earliest.

Q11     Appeal filed before the High Court and Supreme Court cannot be withdrawn unless DSC-3 is
        issued. And it would not be possible to withdraw appeal before acceptance of VVAS. Can
        revised guidelines be issued in this regard?

A11     After the declarant dealer has paid the full tax and interest, as applicable, under the VVAS,
        the Department will issue a letter of intent of issuing DSC-3. After dealer files copy of
        application of withdrawal of Court case, the Department will issue DSC-3. However, this DSC-
        3 will get confirmed only when the case is finally withdrawn.

Q12     In case of remand assessment, the interest is levied upto the date of remand order. Suppose
        the total demand of a dealer is 2 lacs; and the OHA has granted partial relief of 10,000/
        and remitted the matter to the AC(VAT) for the remaining part of the assessment order.
        However, in remand assessment, to claim the benefit of this 10,000/-; the dealer might
        have to pay additional interest of 30,000/- (i.e. on remaining tax: from the date of original
          order till the date of remand order). In such a case, can the declarant pay tax dues as per the
          original assessment order, without getting the remand assessment done as directed by the
A12       Once the remand assessment order is passed, the original order gets merged in the
          remanded order and loses its identity; therefore, declarant shall pay tax dues stated in the
          remand assessment order.

          However, where the objection is partly allowed but remand assessment has not been
          framed till the date of declaration, the declarant can pay tax dues as per the original
          assessment order, provided the declarant pays full tax and interest as per earlier assessment
          order and not a part of it.

Q13       A dealer has been assessed and tax and interest demand created due to 2 ­ 3 reasons. Say
          for example tax and interest has been created against a dealer on account of
          (i)     sale of car;
          (ii)    ITC disallowed on account of non production of Tax invoices.
          Consequential penalty has also been imposed.

          The dealer has already filed an Objection / Appeal and the same is pending. Now the dealer
          wants to pay tax and interest created on any one of the above ground say for example tax
          and interest created on account of sale of car and wants to continue to contest on the
          remaining ground. Can such a dealer filed a declaration and claim immunity from
          corresponding / proportionate penalty?

A13        No. The dealer cannot claim immunity from correspondence/ proportionate penalty. The
          objection /appeal will be decided on priority and dealer can avail of Amnesty Scheme after

Q.14      Whether the dealer has to withdraw the appeal/case filed before the tribunal/High
          Court/Supreme Court before filing DSC-I in the Amnesty Scheme ?

A14       No. The dealer can file DSC-I in the Amnesty Scheme along with an undertaking that the
          case would be withdrawn and he shall file a copy of application of withdrawal submitted in
          the court within 15 days of the issuance of DSC-3, failing which it will be construed that no
          application has been filed under the scheme.

Q15       A dealer has claimed excess ITC to which he was not entitled to or has failed to reverse his
          ITC, which he was legally required to do, can such a dealer now pay the deficient ITC and file
          a declaration to get immunity from interest and penalty?

A15       Yes, the dealer can avail the scheme and pay the deficient ITC and file a declaration in DSC -

Q16       Where a dealer has been assessed u/s 32 and u/s 33 of the DVAT Act for the period 01-04-
          2005 to 31-03-2013 and the dealer has already paid the tax and interest before 31-08-2013,
          what would be the procedure for claiming benefit of waiver of penalty under the scheme?
       Where the dealer has also paid the entire or part of penalty amount, besides entire payment
       of tax and interest, will the dealer be entitled to claim refund of the penalty?

A16   The dealer would not get any penalty waiver if the dealer has paid entire due tax alongwith
       interest before 31-08-2013.The dealer would also be not entitled for any refund of entire or
       part paid penalty amount deposited alongwith tax and interest before 31-08-2013.

Q17    Whether the amount paid towards the stay of demand of penalty can be adjusted towards
       tax dues? For example, assessment is made for an amount of tax and interest for 10,000/-;
       and for penalty - 5,000/-. The dealer deposited stay amount of 2,000/- towards tax; and
        1,000/- towards penalty. How much amount would be deposited by the declarant under

A17    The declarant shall pay 7,000/- [10,000/ (-) 2,000/ (-) 1,000/] under VVAS; and get
       immunity from payment of penalty of 5,000/-.
Q18    Wherein an assessment, Notice of assessment of tax & interest u/s 32 have been passed and
       penalty levied u/s 86(13) of the DVAT Act, Whether a dealer who is now paying tax and
       interest, get immunity from levy of penalty imposed u/s 86(13) of the DVAT Act?

A18    Penalty u/s 86(13) is not a penalty arising due to tax deficiency hence no waiver of penalty
       u/s 86(13) will be admissible under the scheme.

Q19    Where tax and interest have been admitted, and paid; however, penalty is under challenge:
       can VVAS be applied for amount of penalty in relation to such tax? If yes how DSC-1 to be
       filed since nothing would be payable?

A19    As already explained in reply to question no 15.

Q20    A demand of tax & interest and also of penalty was created against a dealer. The amount of
       tax and interest due has already been adjusted against the refunds claimed by the dealer.
       Can declaration be filed for immunity from penalty in such a situation?

A20    In case the adjustment of refund against tax & interest amount has been fully done after
       31/8/2013, than the amount of penalty in relation to such tax can be waived. In such cases
       however, DSC-I will have to be filed giving details


Q21    A composition dealer, say for example, a dealer of drugs and medicines, has;

       (a) Failed to pay tax and failed to furnish his return for the year 2012-13 or;
       (b) Paid tax but failed to furnish his return for the year 2012-13.

       And has also not yet been assessed as a regular dealer, can such a dealer pay tax under the
       composition scheme and regularise his returns? Will such a dealer get immunity from
       penalty / penalties?
A21    The composition dealer can opt for amnesty as a regular dealer. The penalty related to tax
       deficiency will be waived.

Q22    If, while filing a declaration, the declarant inadvertently declares excess turnover and
       consequentially pays 50% tax (in excess) with DSC-1.

               Say for example declarant had to declare turnover of Rs. 1.00 lac but declares it as
       Rs. 10.0 lacs. He was required to pay tax of Rs. 2500/- [being 50% of Rs. 5000/- (tax on Rs.
       1.00 lacs presuming rate of tax as 5%)] but pays Rs. 25,000/-[being 50% of Rs. 50,000/- (tax
       on Rs. 10.00 lacs presuming rate of tax as 5%)].

              Thus Rs. 20,000/- has been paid in excess by the dealer. Can this excess amount be
       claimed as refund or what is the treatment to be done by the dealer?

A22    The dealer should exercise due care in declaring his turnover while filling DSC-I and the
       turnover so declared will not be allowed to be reduced under any circumstances. In case
       tax paid is higher than that required as per declared turnover, the Deptt. Will allow
       adjustment of such excess tax paid by the dealer. However, under no circumstances refund
       would be admissible under Amnesty Scheme.

Q23    A dealer has inadvertently paid (i) excess tax under amnesty scheme, or (ii) has used a wrong
       challan for paying amnesty amount or vice versa.

               Say for example a dealer was required to pay Rs. 5000/- but has inadvertently paid
       Rs. 50,000/- under the scheme.

               Say for paying Rs. 5,000/- under the Amnesty Scheme the dealer has used a DVAT or
       CST challan of Rs. 5,000/- only or vice-versa.

               How the dealer can claim excess tax deposited or deposit by use of a wrong challan.

A23    In case of excess tax paid by the dealer by mistake under Amnesty Scheme and it does not
       commensurate with the turnover declared, the excess tax paid amount will be allowed to
       be adjusted against a future liability.

       In case of use of wrong challans, such cases may be brought to the notice of Amnesty Cell for
       adjustment as payment for Amnesty Scheme.

Q24    A dealer\\\'s RC has been cancelled say for example in 2009-10. He now wants to pay tax & file
       his pending returns. Can such a dealer file declaration under VVAS Scheme? If yes, how can
       he do so?

A24    The dealer can avail the scheme by paying the due taxes as an unregistered dealer.
       However, he will have to seek a fresh registration for the period 1st April,2013 onwards.

Q25    a) Whether a dealer, whose registration has been cancelled due to any reasons, has
          neither deposited tax nor furnished return after cancellation, can opt for the amnesty
          scheme simply by paying the tax dues under the scheme?
       b) Will there be any difference if the objection/appeal against the cancellation order is

       c) If yes, what will be the procedure?

A25    No. There is no provision of summary disposal of restoration application under amnesty
       scheme. The restoration process has to be through objection only. Moreover, suo-motto
       cancellation of registration is done in rare cases due to serious violation. Thus, summarily
       restoring all such cases in amnesty scheme without going into merits may not be possible.
       However, the dealer can avail of the amnesty scheme as unregistered dealer during the
       period of cancellation. The dealer is not expected to file the returns for the unregistered
       period as far as Amnesty scheme is concerned till he gets a new registration or his earlier
       registration is restored.

Q26    Can an unregistered dealer/contractee, who has discontinued his business before 31st March
       2013, pay tax dues under VVAS without getting registration under the Act (to avoid
       registration, and then its cancellation)?

A26    Yes, he can pay tax dues under this Scheme. However, where the dealer claims that he is not
       liable to pay tax under the Act from 1st April 2013 upto the date of declaration, he shall file
       an affidavit in this regard along with DSC-1. In the affidavit the dealer/ contractee shall
       indicate his date of liability (date on which his business activities started) and the date on
       which he ceased to be a dealer/ contractee.

Preparation of DSC-1

Q27    Whether period of turnover, to which tax dues relates, would be disclosed in DSC-1 by the

A27    Yes; so that the dealer can be given the benefit of declaration for that period.

Works Contract/Builder
Q28    A contractee awarded contract of a building to (5) contractors [say Civil Works, Electrical
       Works, Sanitary Works, Tiling Works, Wood work etc.]. The contractee did not deduct TDS
       u/s 36A in respect of any of the contractors.

              Out of these five contractors, four (4) contractors have discharged their liability of
       VAT. Whether the contractee can pay tax only in respect of payment made to 5thcontractor
       who has not discharge his liability of VAT and avail the benefit of the scheme?

A28    Yes, in such cases the contractee can pay tax only in r/o payment made to 5th contractor
       who has not discharged his VAT liability.

       However, the dealer will have to file the relevant documents concerning the discharge of
       VAT liability by other four (4) contractors.

Q29    What will be the scenario if assessment order has already been passed and penalty levied
       for non-deduction of TDS. Say for example a contractee made payment of Rs. 20 lacs each to
       5 contractors but did not deduct / deposit TDS. As per assessment order, tax demand of Rs.
         2 lacs (being 2% on 1 crores for the year 2011-12) and interest has been created against the
         dealer. Besides this penalty of Rs. 4 lacs u/s 36A(8) has also been imposed.

                 Now 4 contractors have already discharged their liability under DVAT Act. Can a
         declarant make a declaration in respect of the payments made to the contractor who has
         not discharged his liability?

A29      Yes, the dealer can make declaration in respect of the 5th contractor who has not discharged
         the liability.

Q30      The Builder, if opts to pay tax @3%, would claim deduction for land from GTO. Will he be
         required to furnish year wise computation of turnover along with DSC-1?

A30      Yes.

Q31      A contractee opts for VVAS and pays tax of 3% after obtaining registration. He is not
         required to file TDS return for the period up to 31.03.2013. His immediate contractor has
         also not filed his return.
         -   Since the language of explanation to clause 3(5) is not clear, whether contractor would
             get immunity from payment of tax, apart from interest and penalty?
         -   What would be the procedure to disclose the name of the contractor by the contractee,
             so that contractor could get immunity from tax, etc.?
A31      Yes. If one of the parties either contractee or contractor avails the Scheme and pays 3% tax,
         then both the parties will get immunity from interest and penalty for the particular contract/
         part of contract. The contractee has to file the return as per the provisions of the DVAT Act
         & Rules wherein the name of contractor has to be filled up.

Q32      It has been stated in the VVAS that double taxation has been avoided in works contract
         transaction. Where the contractee has failed to deduct TDS, but his contractor has paid due
         taxes and filed returns as prescribed, will the contractee get immunity under this scheme? If
         yes, what will be the procedure?

A32      If Contractor has fully paid the amount of tax due (including that of contractee) before
         31.08.2013, the contractee will not be eligible to avail of the scheme.
Q33       Please explain calculation of tax in case of collaboration agreement.


         LO entered into a Collaboration Agreement with the BD, for a property. The BD constructs
         four floors - two would belong to the LO and two to the BD.

      1) BD would also pay a sum of 150 to the LO (area of plot being 200 sq. yds, the size of
         original plot)Total cost of construction for the entire property is 95 i.e. 47.5 for the
         portion of the LO & 47.5 for the BD\\\'s share.

      2) Total cost for the BD for his share comes to 150 plus 95 i.e. 245.

      3) BD sells his share for 300.
A     Tax on works contract carried by BD for LO (for two
      (a) Actual value of construction ­ 47.5

      (b) Circle Rate of construction ­ 47.5
      (not given; assumed at 47.5)
                                                               47.5*      3            1.425
      (c) Circle Rate of Land ­ Amount paid to LO =
      195 ­ 150 = 45                                (Highest of
      (Circle Rate of land assumed at 195 for 50% (a), (b), or
      share of land):                               (c))

      - It is assumed that separate conveyance deed for
      land has neither been executed between LO and
      BD nor between BD and PB
      (If separate conveyance deed signed, then value is
      ascertainable from the same)
      - Tax shall be payable minimum at circle rate of
      *It is presumed that 47.5 comprises of cost of
      materials and labour and the profit earned on

B     Tax on works contract carried by BD for IP
B.1   Two Flats sold during completion of construction
      Step I. Calculate value of Proportionate Share of
      Land transferred to BD
      (a) Amount paid by the BD to LO (+) Value of
      construction for LO as per (A): 150/- (+) 47.5 =
      (b) If (a) is not applicable: then circle rate of Land
      ­ 195/-

      Step II. Calculate value of construction (Sale
      Value ­ Value of Land) (Sale Deed is 300/-)
      (a) If method I.(a) is adopted ­ then 300 ­ 197.5 102.5             3            3.075
      = 102.5/-
      In case where the land cost cannot be ascertained
      by above method then it will be calculated on the
      basis of circle rate of land.

B.2   Alternatively                                            (OR)
      Pay tax @1% on 300                                       300        1            3

C     Total Tax                                                Tax on works contract as calculated in
                                                               (A) + tax on works contract as
                                                               calculated in (B)

In case the actual cost of construction or actual cost of land is not ascertainable from the book
of accounts, circle rates for construction or land shall be taken into account to calculate the VAT

      1) Total cost of construction for the entire property is Rs. 95 i.e. R s. 47.5 for the portion of the
         LO & Rs. 47.5 for the BD\\\'s share.

      2) Total cost for the BD for his share comes to Rs. 150 plus Rs. 95 i.e Rs. 245.

      3) BD sells his share for Rs. 300.

Inter-State Sales against Form C

Q34       A dealer had effected Inter-State sale against Form-C and has charged CST @ 2% from the
          customers. But the dealer has declared less turnover than actual in his return(s). For
          example, turnover of Inter-State Sale against Form-C was Rs. 200 lakh but declared in
          return(s) as Rs. 150 lakh. Whether the dealer can declare the remaining Rs. 50 lakh turnover
          under the Amnesty Scheme? If yes, what would be the rate of tax he has to pay provided the
          dealer can submit Form-C for the additional turnover being declared under the Amnesty

A34       Yes, the dealer can declare the remaining Inter-State sale and the dealer would be taxed @
          2% if the sale is supported by Form-C and GR.

Q35       Assessment was framed against a dealer and demand of tax and interest has been created
          on account of non-submission of statutory forms. Say for example an assessment order had
          been passed against dealer for the year 2009-10 for not submitting forms to the tune of Rs.
          1.00 crore. The dealer filed objections and has now received forms for say Rs. 60 lacs. Now
          consider the following eventualities.

          (i)     The mater has already been remanded back and remanded assessment has not yet
                  been completed,
          (ii)    The mater has already been remanded back and remanded assessment order has
                  already been completed.
          (iii)   The objections are still pending before OHA.
          (iv)    The dealer has not filed any objection / appeal.

A35       In all these cases, the Amnesty Scheme can be availed of only after the reassessment order
          is passed. If the dealer brings the specific cases to the notice of the department, the
          concerned OHA can be requested to decide the case on priority.

Q36       A dealer wants to deposit the CST on pending C forms. Since the dealer has already paid CST
          @2% while filing the return and hence now liable to deposit balance CST @3% (if rate of tax
          is 5%) but in the online DSC-1 application, software is calculating tax @ 5%. How the dealer
          can file declaration in such a situation?
A36   DSC-I online application has facility to deposit tax due not related to turnover. The balance
      amount can be deposited by filling that column.
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