DELHI TAX COMPLIANCE ACHIEVEMENT SCHEME, 2013
HIGHLIGHTS & FAQs
Abbreviations used:
(i) DSC (or) Scheme : Delhi Tax Compliance Achievement Scheme/Voluntary VAT Amnesty
Scheme(VVAS)
(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
31.08.2013
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
(less)
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.
PROCEDURE OF MAKING DECLARATION
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
31.1.2014;
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
21.3.2014;
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.
MISCELLANEOUS
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.
Disclaimer:
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
issued?
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 @gmail.com
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
the
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
5%
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
otherwise?
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.\\\'
Objection/Appeal
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
OHA?
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
reassessment.
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.
Penalty
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 -
1.
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
VVAS?
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
MISCELLANEOUS
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.
Registration
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
pending?
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
declarant?
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 = LAND OWNER, BD = BUILDER DEVELOPER, IP = INTENDING PURCHASER
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
flats)
(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))
Notes:
- 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
construction.
*It is presumed that 47.5 comprises of cost of
materials and labour and the profit earned on
construction.
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 =
197.5
(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/-
OR
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
liability.
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
Scheme?
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.
|
