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Govt woos traders with relief on VAT default
September, 17th 2013

To woo traders ahead of assembly polls, the Delhi government has amended the VAT Act allowing defaulting dealers to pay tax voluntarily and get relief from interest, penalty and criminal prosecution.

The amendment, notified on September 12, also promises time-bound refunds to traders. In case the department defaults, it will have to pay interest on the refund money. At present, the department has over 30,000 refund claims pending. While the VAT Act promised refund within 60 days, traders rarely received it in the stipulated time. However, there is a catch. The amendment makes it mandatory for the traders to claim the refund within one year as it will not be carried forward.

Besides, the department has announced to release refund claims of upto Rs 1 lakh by October 31 based on self-declaration by the dealer. The department will scrutinize papers after the refund is paid.

To curb harassment and corruption after an enforcement survey, the department has decided to fix the criteria for charging security amount from an establishment for getting its premises de-sealed. "At present, there is no fixed amount for de-sealing a business establishment sealed during enforcement survey which would lead to unnecessary harassment of the traders," said Prashant Goyal, VAT commissioner for Delhi.

The defaulting trader will be given three days to voluntarily pay the tax after the survey and de-sealing. If he does so, he will not face criminal prosecution and get a discount of upto 80% on the penalty amount.

Praveen Khandelwal, secretary general, Confederation of All India Traders, welcomed the decisions but raised concern over their implementation. "Most decisions are in line with our demands but the government has to assure us that they are implemented well," said Khandelwal.

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