BILL NO. 08 OF 2015

 

The Delhi Value Added Tax (2^nd Amendment) Bill, 2015

 

(As passed by the Legislative Assembly of the National Capital Territory of Delhi on 30th June, 2015)

 

BILL NO. 08 OF 2015

 

THE DELHI VALUE ADDED TAX (2nd AMENDMENT) BILL, 2015

A

BILL

to further amend the Delhi Value Added Tax Act, 2004 (3 of 2005).

BE it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Sixty-sixth year of the Republic of India as follows:-

1. Short title, extent and commencement.- (i) This Act may be called the Delhi Value Added Tax (Second Amendment) Act, 2015.

(ii) It extends to the whole of the National Capital Territory of Delhi.

(iii) 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.

2. Amendment of section 4.- In the principal Act, in section 4, in sub-section (1), for clause (c), the following clause shall be substituted, namely:-

"(c) in respect of goods specified in the Fourth Schedule, at the rates specified therein against the description of goods :

Provided that the rate of tax in respect of goods specified in the Fourth Schedule shall be higher than the rate of tax applicable under clause (e) of this sub-section but shall not be more than thirty paise in the rupee;".

3. Amendment of section 8- In the principal Act, in section 8,-

(i) in sub-section (1), for clause (c), the following clause shall be substituted, namely:-

" (c) the previously agreed consideration for that sale has been altered by agreement with the recipient for any reason except where a discount or incentive is offered through a credit note after issuance of tax invoice in respect of a sale to a registered dealer;"; and

• in sub-section (2), after clause (b), the following explanation shall be inserted, namely:-

"Explanation : Credit notes issued on account of post sale discounts or incentives will be independent of tax component and no adjustments in the output tax would be required to be made.".

4. Amendment of Section 10.-In the principal Act, in section 10,-

• for sub-section (1), the following sub-section shall be substituted, namely:-

"(1) Subject to sub-sections (1) and (2) of section 8, 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.

Explanation : While issuance of a credit note of a post sale discount or incentive by a selling dealer, where no adjustment to output tax, as per the provisions of sub-sections (1) and (2) of section 8 has been made, no adjustment for reduction of input tax credit would be required by the respective buying registered dealer."; and

• in sub-section (5), for the starting word "Where", the words and symbol "Subject to sub-sections (1) and (2) of section 8 and conditions as may be prescribed, where" shall be substituted.

5. Amendment of section 22.- In the principal Act, in section 22, sub-section (7) shall be omitted.

6. Amendment of section 38.- In the principal Act, in section 38, in sub-section (5), for the words "fifteen days", the words "forty five days" shall be substituted.

7. Amendment of section 51.- In the principal Act, in section 51, for the starting word "Where", the words and symbol "Subject to sub-sections (1) and (2) of section 8, where" shall be substituted.

8. Amendment of section 86. In the principal Act, in section 86

• in sub-section (5), for the words "five hundred", the words "two hundred" shall be substituted;
• for sub-section (6),the following sub-section shall be substituted, namely:-

"(6) If a registered dealer fails to comply with the provisions of sub-section (2) of section 22 of this Act, he shall be liable to pay, by way of penalty, a sum equal to two hundred rupees for every day of default subject to a maximum of twenty five thousand rupees.";

• in sub-section (9), for the words "five hundred", the words "two hundred" shall be substituted;
• in sub-section (16), for clause (b), the following clauses shall be substituted, namely:-

"(b) having issued a tax invoice or retail invoice, has failed to account it correctly in his books of account; or

(c) failed to issue a tax invoice or retail invoice as required under the provisions of section 50 of this Act;" and

• in sub-section (20), the explanation shall be omitted.

9. Amendment of section 89.- In the principal Act, in section 89, in sub-section (4), clause (c) shall be omitted.

10. Amendment of the Fourth Schedule.- In the principal Act, for the Fourth Schedule appended thereto, the following shall be substituted, namely:-

The Fourth Schedule

(see section 4)

S. No.	Commodity	Rate of Tax
	Petroleum Products other than liquid petroleum gas, piped natural gas, Compressed Natural Gas and Kerosene such as Naptha; Aviation Turbine Fuel; Spirit; Gasoline Furnace oil; Wax (except petroleum wax used for manufacture of candles); Mixture and combination of above products.	Twenty paise in the rupee
	Liquor (Foreign and Indian Made Foreign Liquor).	Twenty paise in the rupee
	Country Liquor	Twenty paise in the rupee
	Narcotics (Bhaang).	Twenty paise in the rupee
	Molasses	Twenty paise in the rupee
	Rectified Spirit	Twenty paise in the rupee
	Lottery Tickets	Twenty paise in the rupee
	Brake Fluid	Twenty paise in the rupee
	Tobacco and Gutkha, unmanufactured tobacco, bidis and tobacco used in manufacture of bidis and hooka tobacco	Twenty paise in the rupee
	Aerated Drinks	Twenty paise in the rupee
	Watches costing above rupees five thousand	Twenty paise in the rupee

This Bill has been passed by the Legislative Assembly of the National Capital Territory of Delhi on the 30th June, 2015.

 

DELHI

Dated: 30th June, 2015

(Ram Niwas Goel)

Speaker,

Legislative Assembly of the National Capital Territory of Delhi

 

STATEMENT OF OBJECTS AND REASONS

Amendment in section 4 is aimed to make enabling provisions in the Act for levy of VAT in respect of goods described in the Fourth Schedule at such rates as may be notified by the Government and specified against the description of goods enlisted therein instead of a flat rate of 20%. However, this will be subject to the condition that such rates shall be higher than the rate of tax applicable under clause (e) of section 4(1) in respect of goods not specified in any of the Schedules but shall not be more than 30%.

Amendment in section 8 is proposed to disallow the adjustments in output tax of the selling dealer and the input tax of the purchasing dealers on account of issuance of credit notes by the selling dealers for post sale discounts and incentives as monitoring of such adjustments is not only a tedious job but also have no impact on the overall tax receipts of the Department.

Amendment of section 22 is proposed to do away with filing of certificate of registration, while applying for cancellation of his registration or the registration has been cancelled otherwise by the department. It will smoothen the process of online filing of application. Consequential amendments are also proposed in section 86 and 89.

Amendment of section 38 is proposed to increase the time limit of 15 days to 45 days for seeking security from the dealers claiming refund if security is required during processing of refund claims.

Amendment of section 86 is proposed to reduce the amount of penalties for delay in furnishing of information relating to change in the nature of business or closure of business, late filing of returns, non-furnishing of information and non-issuance of invoices. The explanation appearing after sub-section (20) is also proposed to be omitted to avoid duplicity.

Amendments in the principal Act are being proposed for removing deficiencies / legal lacunae in the statute thereby making the tax administration simpler and convenient for the dealers.

The Bill seeks to achieve the aforesaid objectives.

 

(MANISH SISODIA)

DEPUTY CHIEF MINISTER / FINANCE MINISTER

 

FINANCIAL MEMORANDUM

The Delhi Value Added Tax (Second Amendment) Bill, 2015 does not involve any additional financial implications since no outgo on new posts is anticipated from the Consolidated Fund of the National Capital Territory of Delhi.

 

 

MEMORANDUM REGARDING DELEGATED LEGISLATION

The Delhi Value Added Tax (Second Amendment) Bill, 2015 does not make provision for the delegation of power in favour of any functionaries to make subordinate legislation.

Tax rate cap for scheduled goods permits notified higher rates while excluding post sale discount credit notes from tax adjustments. The Bill substitutes section 4 to allow government notified, schedule specific tax rates for goods in the Fourth Schedule that must exceed the general non scheduled rate but remain subject to an overall cap. Sections 8 and 10 are amended to state that post sale credit notes for discounts or incentives are independent of the tax component and do not require output tax adjustments, while purchasers must adjust input tax credit for actual shortfalls or excesses when credit/debit notes are issued or goods are returned. Amendments also streamline registration cancellation, extend the refund security period, revise penalties and replace the Fourth Schedule listing specified commodities.