DELHI VALUE ADDED TAX ACT, 2004
|
(Delhi Act 3 of 2005)
The Act has come into force with effect from 1st April 2005 vide Notification No. F.101(318)/2005-Fin.(A/Cs)(i)/8581, dated 30th March 2005
As amended
by Delhi Value Added Tax (Amendment) Act, 2005
(1 of 2005) which came into effect from 1st
April 2005 vide Notification No. No
. F.101(318)/2005-Fin.(A/Cs)(ii)/8592, dated 30th
March 2005 and subsequent amendments
to consolidate and amend the law relating to levy of tax on sale of goods, tax on transfer of property involved in execution of works contracts, tax on transfer of right to use goods and tax on entry of motor vehicles by way of introducing a value added tax regime in the local areas of the National Capital Territory of Delhi.
BE it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Fifty-fifth Year of the Republic of India as follows:-
CHAPTER I
1 Short title, extent and commencement
(1) This Act may be called the Delhi Value Added Tax Act, 2004.
(2) It extends to the whole of the National Capital Territory of Delhi.
(3) 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 and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
2 Definitions
(1) In this Act, unless the context otherwise requires, -
(a) “accountant” means –
(i) a chartered accountant within the meaning of the Chartered Accountant’s Act, 1949 (Act 38 of 1949);
(ii) a person who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered; or
[1][(iii) a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959); or]
[2][(iv)] a person referred to in section 619 of the Companies Act, 1956 (1 of 1956);
(b) “adequate proof” means such documents, testimony or other evidence as may be prescribed;
(c) “Appellate Tribunal” means the Appellate Tribunal constituted under section 73 of this Act;
(d) “business” includes -
[3][(i) the provision of any services, but excluding the services provided by an employee;]
(ii) any trade, commerce or manufacture;
(iii) any adventure or concern in the nature of trade, commerce or manufacture;
(iv) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern; and
(v) any occasional transaction in the nature of such service, trade, commerce, manufacture, adventure or concern whether or not there is volume, frequency, continuity or regularity of such transaction;
whether or not such service, trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such service, trade, commerce, manufacture, adventure or concern;
Explanation.- For the purpose of this clause –
(i) any transaction of sale or purchase of capital assets pertaining to such service, trade, commerce, manufacture, adventure or concern shall be deemed to be business;
(ii) purchase of any goods, the price of which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be business;
(e) “business premises” means -
(i) the address of a dealer, registered with the Commissioner; and
(ii) any building or place used by a person for the conduct of his business, except for those parts of the building or place used principally as a residence;
[4][(f) “capital goods” means plant, machinery and equipment used, directly or indirectly, in the process of trade or manufacturing or for execution of works contract in Delhi;]
(g) “casual trader” means a person who, whether as principal, agent or in any other capacity undertakes occasional transactions in the nature of business involving buying, selling, supply or distribution of goods or conducting any exhibition-cum-sale in Delhi whether for cash, deferred payment, commission, remuneration or other valuable consideration;
(h) “Commissioner” means the Commissioner of Value Added Tax appointed under sub-section (1) of section 66 of this Act;
(i) “in the course of” includes activities done for the purposes of, in connection with, or incidental to and activities done as part of the preparation for the activity and in the termination of, the activity;
[5][(j) “dealer” means any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business, buys or sells goods in Delhi directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes, -
(i) a factor, commission agent, broker, del credere agent or any other mercantile agent by whatever name called, who for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of the business, buys or sells or supplies or distributes any goods on behalf of any principal or principals whether disclosed or not ;
(ii) a non-resident dealer or as the case may be, an agent, residing in the State of a non-resident dealer, who buys or sells goods in Delhi for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of the business;
(iii) a local branch of a firm or company or association of persons, outside Delhi where such firm company, association of persons is a dealer under any other sub-clause of this definition;
(iv) a club, association, society, trust, or cooperative society, whether incorporated or unincorporated, which buys goods from or sells goods to its members for price, fee or subscription, whether or not in the course of business;
(v) an auctioneer, who sells or auctions goods whether acting as an agent or otherwise or, who organizes the sale of goods or conducts the auction of goods whether or not he has the authority to sell the goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal;
(vi) a casual trader ;
(vii) any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business disposes of any goods as unclaimed or confiscated, or as unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale.
Explanation.- For the purposes of this clause, each of the following persons, bodies and entities who sells any goods whether in the course of his business, or by auction or otherwise, directly or through an agent for cash or for deferred payment or for any other valuable consideration, shall, notwithstanding anything contained in clause (d) or any other provision of this Act, be deemed to be a dealer, namely:-
(i) Customs Department of Government of India administering Customs Act, 1962 (52 of 1962);
(ii) Departments of Union Government, State Governments and Union territory Administrations;
(iii) Local authorities, Panchayats, Municipalities, Development Authorities, Cantonment Boards;
(iv) Public Charitable Trusts;
(v) Railway Administration as defined under the Indian Railways Act, 1989 (24 of 1989) and Delhi Metro Rail Corporation Limited;
(vi) Incorporated or unincorporated societies, clubs or other associations of persons;
(vii) Each autonomous or statutory body or corporation or company or society or any industrial, commercial, banking, insurance or trading undertaking, corporation, institution or company whether or not of the Union Government or any of the State Governments or of a local authority;
(viii) Delhi Transport Corporation;
(ix) Shipping and construction companies, air transport companies, airlines and advertising agencies.]
(k) “Delhi” means the National Capital Territory of Delhi;
(l) “fair market value” means the value at which goods of like kind and quality are sold or would be sold in the same quantities between unrelated parties in the open market in Delhi;
(m) “goods” means every kind of moveable property (other than newspapers, actionable claims, stocks, shares and securities) and includes -
(i) livestock, all materials, commodities, grass or things attached to or forming part of the earth which are agreed to be severed before sale or under a contract of sale; and
(ii) property in goods (whether as goods or in some other form) involved in the execution of a works contract, lease or hire-purchase or those to be used in the fitting out, improvement or repair of movable property;
(n) “goods vehicle” means a motor vehicle, vessel, boat, animal and any other form of conveyance used for carrying goods;
(o) “Government” means the Lieutenant Governor of the National Capital Territory of Delhi appointed by the President under article 239 and designated as such under article 239AA of the Constitution;
(p) “import of goods into Delhi” means taking, receiving, bringing, carrying, transporting, or causing to bring or receive goods into Delhi from any place outside Delhi;
Explanation.- In the case of goods arriving in Delhi from a foreign country through Customs, the “import of the goods in Delhi” occurs at the place where the goods are cleared by Customs for home consumption;
(q) “importer” means -
(i) a person who brings his own goods into Delhi; or
(ii) a person on whose behalf another person brings goods into Delhi; or
(iii) in the case of a sale occurring in the circumstances referred to in sub-section 2 of section 6 of the Central Sales Tax Act, 1956 (74 of 1956), the person in Delhi to whom the goods are delivered;
(r) “input tax” in relation to the purchase of goods, means the proportion of the price paid by the buyer for the goods which represents tax for which the selling dealer is liable under this Act;
[6][(ra) “manufacture” with its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods, but does not include any such process or mode of manufacture as may be prescribed;]
(s) “net tax” means the amount calculated for a tax period under section 11 of this Act;
(t) “non-creditable goods” means the goods listed in the Seventh Schedule;
(v) “non-resident” means a person who has no fixed place of business or residence in Delhi;
(w) “notified” means notified by the Commissioner in the official Gazette;
(x) “official Gazette” means the Delhi Gazette;
(y) “prescribed” means prescribed by rules made under this Act;
(z) “registered dealer” means a dealer registered under this Act;
(za) a person is “related” to another person (referred to in this definition as a “dealer”) if the person -
(i) is a relative of the dealer;
(ii) is a partnership of which the dealer is a partner;
(iii) is a company in which the dealer (either alone or in conjunction with another person who is, or persons who are, related to the dealer under another sub-clause of this clause) directly or indirectly holds forty per cent or more of outstanding voting stock or shares;
(iv) is a person who (either alone or in conjunction with another person who is, or other persons who are, related to the person under another sub-clause of this clause) directly or indirectly owns forty per cent or more of outstanding voting stock or shares of the dealer;
(v) is a company in which forty per cent or more of outstanding voting stock is held directly or indirectly by a person (either alone or in conjunction with another person who is, or other persons who are, related to the person under another sub-clause of this clause) who also holds forty per cent or more of the outstanding voting stock or shares of the dealer; or
(vi) is controlled by the dealer, a person whom the dealer controls, or is a person who is controlled by the same person who controls the dealer;
(zb) “relative” means a relative as defined in clause 41 of section 2 of the Companies Act, 1956 (1of 1956);
(zc) “sale” with its grammatical variations and cognate expression means any transfer of property in goods by one person to another for cash or for deferred payment or for other valuable consideration (not including a grant or subvention payment made by one government agency or department, whether of the central government or of any state government, to another) and includes-
(i) a transfer of goods on hire purchase or other system of payment by installments, but does not include a mortgage or hypothecation of or a charge or pledge on goods;
(ii) supply of goods by a society (including a co-operative society), club, firm, or any association to its members for cash or for deferred payment or for commission, remuneration or other valuable consideration, whether or not in the course of business;
(iii) transfer of property in goods by an auctioneer referred to in sub-clause (vii) of clause (j) of this section, or sale of goods in the course of any other activity in the nature of banking, insurance who in the course of their main activity also sell goods repossessed or re-claimed;
(iv) transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;
(v) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;
(vi) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(vii) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration;
(viii) every disposal of goods referred to in sub-clause (ix) of clause (j) of this section
and the words “sell”, buy” and “purchase” wherever appearing with all their grammatical variations and cognate expressions, shall be construed accordingly;
(zd) “sale price” means the amount paid or payable as valuable consideration for any sale, including-
(i) the amount of tax, if any, for which the dealer is liable under section 3 of this Act;
(ii) in relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable to a person for such delivery including hire charges, interest and other charges incidental to such transaction;
(iii) in relation to transfer of the right to use any goods for any purpose (whether or not for a specified period) the valuable consideration or hiring charges received or receivable for such transfer;
(iv) any sum charged for anything done by the dealer in respect of goods at the time of, or before, the delivery thereof;
(v) amount of duties levied or leviable on the goods under the Central Excise Act, 1944 (1 of 1944) or the Customs Act, 1962 (52 of 1962), or the Punjab Excise Act, 1914 (1 of 1914) as extended to the National Capital Territory of Delhi whether such duties are payable by the seller or any other person; and
(vi) amount received or receivable by the seller by way of deposit (whether refundable or not) which has been received or is receivable whether by way of separate agreement or not, in connection with, or incidental to or ancillary to the sale of goods;
(vii) in relation to works contract means the amount of valuable consideration paid or payable to a dealer for the execution of the works contract;
less -
(a) any sum allowed as discount which goes to reduce the sale price according to the practice, normally, prevailing in trade;
(b) the cost of freight or delivery or the cost of installation in cases where such cost is separately charged;
and the words “purchase price” with all their grammatical variations and cognate expressions, shall be construed accordingly;
[7][Provided that an amount equal to the increase in the prices of petrol and diesel (including the duties and levies charged thereon by the Central Government) taking effect from the 6th June, 2006 shall not form part of the sale price of petrol and diesel sold on and after the date of the promulgation of this Ordinance till such date as the Government may, by notification in the official Gazette, direct:
Provided further that the first proviso shall not take effect till the benefit is passed on to the consumers.]
Explanation.- A dealer’s sale price always includes the tax payable by it on making the sale, if any;
(ze) “Schedule” means a Schedule appended to this Act;
(zf) “tax” means tax payable under this Act;
(zg) “taxable quantum” means the amount defined in sub-section (2) of section 18 of this Act;
(zh) “tax invoice” means the document defined in section 50 of this Act;
(zi) “tax period” means the period prescribed in the rules made under this Act;
(zj) “tax fraction” means the fraction calculated in accordance with formula,
r / (r+100)
where ‘r’ is the percentage rate of tax applicable to the sale under this Act;
(zk) “transporter” means any person who, for the purposes of or in connection with or incidental to or in the course of his business transports or causes to transport goods, and includes any person whose business consists of or includes operating a railway, shipping company, air cargo terminal, inland container depot, container freight station, courier service or airline;
(zl) “turnover of purchases” means the aggregate of the amounts of purchase price paid or payable by a person in any tax period, including any input tax;
(zm) “turnover” means the aggregate of the amounts of sale price received or receivable by the person in any tax period, reduced by any tax for which the person is liable under section 3 of this Act;
(zn) “value of goods” means the fair market value of the goods at that time including insurance charges, excise duties, countervailing duties, tax paid or payable under the Central Sales Tax Act, 1956 (74 of 1956) in respect of the sale, transport charges, freight charges and all other charges incidental to the transaction of the goods;
(zo) “works contract” includes any agreement for carrying out for cash or for deferred payment or for valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, repair or commissioning of any moveable or immovable property;
(zp) “year” means the financial year from the first day of April to the last day of March;
(2) Unless otherwise specified in this Act-
(a) words importing the masculine gender shall include the feminine gender;
(b) words in singular shall include their plural and vice versa;
(c) expressions referring to “writing” shall include printing, typing, lithography, photography and other methods of representing or reproducing words in a visible form; and
(d) with reference to a person who is unable to sign his name, the words “signature” shall include his thumb impression or other mark duly attested to signify his signature.
(1) Subject to other provisions of this Act, every dealer who is –
(a) registered under this Act; or
(b) required to be registered under this Act;
shall be liable to pay tax calculated in accordance with this Act, at the time and in the manner provided in this Act.
[8][(2) Every dealer shall be liable to pay tax at the rates specified in section 4 of this Act on every sale of goods effected by him –
(a) while he is a registered dealer under this Act; or
(b) on and from the day on which he was required to be registered under this Act.]
[9][(3) The amount of tax payable under this Act by a dealer, is the dealer’s net tax for the tax period calculated under section 11 of this Act.]
[10][(4) the net tax of a dealer shall be paid within twenty-eight days of the conclusion of the dealer’s tax period:
PROVIDED that the Commissioner may, by an order, prescribe that irrespective of the tax period of a dealer or class of dealers, the net tax of a dealer or a class of dealers shall be paid within 28 days of the conclusion of a period shorter than the tax period that may be specified in the order.
Explanation.- The obligation to pay the tax arises by virtue of this provision and is not dependent on furnishing a return, nor on the issue of a notice of assessment to the dealer.]
(5) Tax shall be paid in the manner specified in section 36 of this Act.
(6) Every dealer who has become liable to pay tax under this Act on the sale of goods shall continue to be so liable unless his taxable turnover during the preceding twelve months (and such further period as may be prescribed) has remained below the taxable quantum and on the expiry of the twelve months or such further period his liability to pay tax shall cease:
PROVIDED that any dealer whose liability to pay tax under this Act ceases for any other reason may apply earlier for the cancellation of his registration, and on such cancellation, his liability to pay tax shall cease:
PROVIDED FURTHER that a dealer shall remain liable to pay tax until the date on which his registration is cancelled.
(7) Every dealer whose liability to pay tax under this Act has ceased or whose registration has been cancelled, shall, if his turnover calculated from the commencement of any year, including the year in which the registration has been cancelled, again exceeds the taxable quantum on any day within such year be liable to pay such tax on and from the date on which his turnover again exceeds the taxable quantum, on all sales effected by him on and after that day.
(8) Where it is found that any person registered as a dealer ought not to have been so registered, then notwithstanding anything contained in this Act, such person shall be liable to pay tax for the period during which he was registered.
(9) If any person who transports goods or holds goods in custody for delivery to or on behalf of any person, on being required by the Commissioner so to do, fails –
(a) to furnish any information in his possession in respect of the goods; or
(b) fails to permit inspection thereof;
then without prejudice to any other action which may be taken against such person, a presumption may be raised that the goods in respect of which he has failed to furnish information or permit inspection, are owned by him and are held by him for sale in Delhi and the provisions of this Act shall apply accordingly.
[11][(10) If any person who, whether as principal, agent or in any other capacity organizes any exhibition-cum-sale in Delhi and fails –
(a) to furnish any information in respect of the goods brought or kept in stock or sold by any participant before or during or after the exhibition-cum-sale; or
(b) to ensure that all the participants in the exhibition-cum-sale have obtained registration under this Act and paid due tax; or
(c) to permit inspection of the business premises or goods or account and records of the participants; or
(d) to permit inspection of the accounts and records of the organizer in respect of the exhibition-cum-sale;
then, without prejudice to any other action which may be taken against such participant, a presumption may be raised that the goods of the participant who fails to obtain registration under this Act or the goods in respect of which the participant has failed to furnish information or failed to permit inspection, are owned by the organizer and are held by him for sale in Delhi and the provisions of this Act shall apply accordingly.]
(1) The rates of tax payable on the taxable turnover of a dealer shall be-
(a) in respect of goods specified in the Second Schedule, at the rate of one paisa in the rupee;
(b) in respect of goods specified in the Third Schedule, at the rate of four paise in the rupee;
(c) in respect of goods specified in the Fourth Schedule, at the rate of twenty paise in the rupee; [12][***]
[13][(d) in respect of the goods involved in the execution of the works contract, at the rate of twelve and a half paise in the rupee; and]
[14][PROVIDED that tax shall be paid at the rate of four paise in the rupee of the turnover of the dealer pertaining to declared goods, as defined from time to time in the Central Sales Tax Act, 1956 (74 of 1956), involved in the execution of works contract if such goods are transferred from the contractor to the contractee in the same form in which they were purchased by the contractor:
PROVIDED FURTHER that in respect of the works contracts which are in the nature of printing works, the rate of tax shall be four paise in the rupee.]
[15][(e)] in the case of any other goods, at the rate of twelve and a half paise in the rupee:
PROVIDED that the rate of tax on packing materials or containers shall be the same as the rate at which the goods sold are chargeable to tax.
(2) The Government may, if it deems necessary, reduce the rates of tax as specified in sub-section (1), by a notification to that effect in the official Gazette.
(1) For the purposes of this Act, taxable turnover means that part of dealer’s turnover arising during the tax period which remains after deducting therefrom -
(a) the turnover of sales not subject to tax under section 7 of this Act; and
(b) the turnover of sales of goods declared exempt under section 6 of this Act.
[16][(2) In the case of turnover arising from the execution of a works contract, the amount included in taxable turnover is the total consideration paid or payable to the dealer under the contract excluding the charges towards labour, services and other like charges, subject to such conditions as may be prescribed:
PROVIDED that where the amount of charges towards labour, services and other like charges is not ascertainable from the books of accounts of the dealer, the amount of such charges shall be calculated at the prescribed percentages.]
6 Sale exempt from tax
(1) The sale of goods listed in the First Schedule shall be exempt from tax subject to the conditions and exceptions set out therein.
(2) The dealers or class of dealers specified in the Fifth Schedule shall be exempt from payment of tax on all sales of goods effected by them subject to such conditions as may be prescribed.
(3) Where a dealer sells capital goods which he has used since the time of purchase exclusively for purposes other than making non-taxed sale of goods, and has not claimed a tax credit in respect of such capital goods under section 9, the sale of such capital goods shall be exempt from tax.
7 Certain sales not liable to tax
Nothing contained in this Act or the rules made thereunder shall be deemed to impose or authorise the imposition of tax on any sale of goods when such sale takes place -
(a) in the course of inter-state trade or commerce; or
(b) outside Delhi; or
(c) in the course of import of the goods into or export of the goods out of, the territory of India.
Explanation. - Sections 3, 4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining whether or not a particular sale takes place in the manner indicated in clause (a), clause (b) or clause (c) of this section.
[17][(d) in accordance with the notification issued by the Central Government in exercise of its powers under section 3 of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel) Act, 2002 (36 of 2002), no tax shall be levied on sales of the fuel and lubricants which are filled into receptacles forming part of any aircraft registered in a country other than India, if-
(i) the said country is a party to the Convention on International and Civil Aviation, 1944; and
(ii) the said country has entered into an Air Services agreement with India; and
(iii) the aircraft is operating on a scheduled or non-scheduled service to or from India.]
(1) [18][Subject to such conditions as may be prescribed, this section shall apply where, in relation to the sale of goods by any dealer – ]
(a) that sale has been cancelled;
(b) the nature of that sale has been fundamentally varied or altered;
(c) the previously agreed consideration for that sale has been altered by agreement with the recipient, whether due to the offer of a discount or for any other reason;
[19][(d) the goods or part of the goods sold have been returned to the dealer within six months of the date of sale; or]
(e) the whole or part of the price owed by the buyer for the purchase of the goods has been written-off by the dealer as a bad debt;
and the dealer has –
(i) provided a tax invoice in relation to that sale and the amount shown therein as tax charged on that sale is not the tax properly chargeable on that sale; or
(ii) furnished a return in relation to a tax period in respect of which tax on that sale is attributable, and has accounted for an amount of tax on that sale that is not the amount properly chargeable on that sale.
(2) Where a dealer has accounted for an incorrect amount of tax as contemplated in sub-section (1), that dealer shall make an adjustment in calculating the tax payable by that dealer in the return for the tax period during which it has become apparent that the tax is incorrect, and if –
(a) the tax payable in relation to that sale exceeds the tax actually accounted for by the dealer, the amount of that excess shall be deemed to arise in the tax period in which the adjustment is made, and shall not be attributable to any prior tax period; or
(b) the tax actually accounted for exceeds the tax payable in relation to the sale, the amount of that deficiency shall be subtracted from the tax payable by the dealer in the tax period in which the adjustment is made, and shall not be attributable to any prior tax period.
(3) Where a dealer sells goods that have been used in part for making -
(a) sales that are subject to tax under this Act or sales that are not liable to tax under section 7; and
(b) partly for other purposes,
the amount of tax on the sale of the goods shall be the greater of -
(i) A – (A x B / C); or
(ii) A – B;
where
A = the tax for which the dealer would be liable in respect of the sale apart from this section;
B = the amount by which the tax credit of the dealer in respect of the goods was reduced under sub-section (4) of section 9 of this Act;
C = the amount of the tax credit before reduction under sub-section (4) of section 9 of this Act.
[20][(1) Subject to sub-section (2) of this section and such conditions, restrictions and limitations as may be prescribed, a dealer who is registered or is required to be registered under this Act shall be entitled to a tax credit in respect of the turnover of purchases occurring during the tax period where the purchase arises in the course of his activities as a dealer and the goods are to be used by him directly or indirectly for the purpose of making –
(a) sales which are liable to tax under section 3 of this Act; or
(b) sales which are not liable to tax under section 7 of this Act.
Explanation.- Sales which are not liable to tax under section 7 of this Act involve exports from Delhi whether to other States or Union territories or to foreign countries.]
(2) No tax credit shall be allowed –
(a) in the case of the purchase of goods for goods purchased from a person who is not a registered dealer;
(b) for the purchase of non-creditable goods;
(c) for the purchase of goods which are to be incorporated into the structure of a building owned or occupied by the person;
Explanation.- This sub-section does not prevent a tax credit arising for goods and building materials that are purchased either for the purpose of re-sale in an unmodified form, or for the performance of a works contract on a building owned or occupied by another;
(d) for goods purchased from a dealer who has elected to pay tax under section 16 of this Act;
[21][(e) for goods purchased from a casual trader;]
[22][[23]{(f)} to the dealers or class of dealers specified in the Fifth Schedule except the entry no.1 of the said Schedule.]
(3) The amount of the tax credit to which a dealer is entitled in respect of the purchase of goods shall be the amount of input tax arising in the tax period reduced in the manner described in sub-sections (4) and (6) of this section.
(4) Where a dealer has purchased goods and the goods are to be used partly for the purpose of making the sales referred to in sub-section (1) of this section and partly for other purposes, the amount of the tax credit shall be reduced proportionately.
(5) The method used by a dealer to determine the extent to which the goods are used in the manner specified in sub-section (4) of this section, shall be fair and reasonable in the circumstances:
PROVIDED that the Commissioner may -
(a) after giving reasons in writing, reject the method adopted by the dealer and calculate the amount of tax credit; and
(b) prescribe methods for calculating the amount of tax credit or the amount of any adjustment or reduction of a tax credit in certain instances.
Explanation.- A person may object in the manner referred to in section 74 of this Act to a decision of the Commissioner to reject a method of calculating a tax credit.
(6) [24][Notwithstanding anything contained to the contrary in sub-section (1), where – ]
(a) a dealer has purchased goods (other than capital goods) for which a tax credit arises under sub-section (1) of this section;
(b) the goods or goods manufactured out of such goods are to be exported from Delhi by way of transfer to a –
(i) non-resident consignment agent; or
(ii) non-resident branch of the dealer; and
(c) the transfer will not be by way of a sale made in Delhi;
the amount of the tax credit shall be reduced by the prescribed percentage.
(7) For the removal of doubt, no tax credit shall be allowed for -
(a) the purchase of goods from an unregistered dealer;
(b) the purchase of goods which are used exclusively for the manufacture, processing or packing of goods specified in the First Schedule.
[25][(c) any purchase of consumables or of capital goods where the dealer is exclusively engaged in doing job work or labour work and is not engaged in the business of manufacturing of goods for sale by him and incidental to the business of job work or labour work, obtains any waste or scrap goods which are sold by him.]
(8) The tax credit may be claimed by a dealer only if he holds a tax invoice at the time the prescribed return for the tax period is furnished.
[26][(9)(a) Notwithstanding anything contained to the contrary in sub-sections (1) and (3) and subject to sub-section (2), tax credit in respect of capital goods shall be allowed as follows: -
(i) 1/3rd of the input tax on such capital goods arising in the tax period, in the same tax period;
(ii) balance 2/3rd of such input tax, in equal proportions in two immediately successive financial years :
PROVIDED that, where the dealer sells such capital goods, the dealer shall be allowed as tax credit, the balance amount of the input tax, if any, in respect of such capital goods as has not been earlier availed as tax credit, such tax credit shall be allowed in the tax period in which such capital goods are sold and only after adjusting the output tax payable by him:
[27][PROVIDED FURTHER that where the dealer transfers such capital goods from Delhi otherwise than by way of sale before the expiry of three years from the date of purchase, he shall, after claiming the balance amount of input tax, if any, not availed earlier in respect of such capital goods, reduce the input tax credit by the prescribed percentage of the purchase price of such capital goods and make adjustments in the input tax credit in the tax period in which these capital goods are so transferred:
PROVIDED ALSO that where a dealer has purchased capital goods and the capital goods are to be used partly for the purpose of making sales referred to in sub-section (1) of this section and partly for other purposes, the amount of tax credit shall be reduced proportionately:]
PROVIDED ALSO that no tax credit in respect of capital goods shall be allowed if such capital goods are used exclusively for the purpose of making sale of exempted goods specified in the first schedule:
PROVIDED ALSO that no tax credit in respect of capital goods shall be allowed on that part of the value of such capital goods which represents the amount of input tax on such capital goods, which the dealer claims as depreciation under section 32 of the Income Tax Act, 1961 (43 of 1961).
(b) If any capital goods in respect of which tax credit is allowed under clause (a) of this sub-section is transferred to any other person otherwise than by way of sale at the fair market value before the expiry of a period of five years from the date of purchase, the tax credit claimed in respect of such purchase shall be [28][reversed] in the tax period during which such transfer takes place.]
(1) 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.
(2) If goods which have been purchased were -
(a) intended to be used for the purposes specified under sub-section (1) of section 9 of this Act and are subsequently used, fully or partly, for purposes other than those specified under the said sub-section; or
(b) intended for purposes other than those specified under sub-section (1) of said section 9 of this Act, and are subsequently used, fully or partly, for the purposes specified in the said sub-section;
the tax credit claimed in respect of such purchase shall be reduced or increased (as the case may be) for the tax period during which the said utilization otherwise has taken place.
(3) Where –
(a) goods were purchased by a dealer;
(b) the dealer claimed a tax credit in respect of the goods, and did not reduce the tax credit by the prescribed percentage; and
(c) the goods are exported from Delhi, other than by way of a sale, to a branch of the registered dealer or to a consignment agent;
the dealer shall reduce the amount of tax credit originally claimed by the prescribed proportion.
(4) If goods which have been purchased by a dealer were –
(a) intended to be used for the purposes specified under sub-section (1) of section 9 of this Act; and
(b) are subsequently incorporated into the structure of a building owned or occupied by the person;
the tax credit claimed in respect of such purchase shall be reduced in the tax period during which such incorporation takes place.
(1) The net tax payable by a dealer for a tax period shall be determined by the formula:
Net Tax = O – I – C
where
O = the amount of tax payable by the person at the rates stipulated in section 4 of this Act in respect of the taxable turnover arising in the tax period, adjusted to take into account any adjustments to the tax payable required by section 8 of this Act.
I = the amount of the tax credit arising in the tax period to which the person is entitled under section 9 of this Act, adjusted to take into account any adjustments to the tax credit required by section 10 of this Act.
C = the amount, if any, brought forward from the previous tax period under sub-section (2) of this section.
(2) Where the net tax of a dealer calculated under sub-section (1) of this section amounts to a negative value, the dealer shall –
(a) adjust the said amount in the same tax period against the tax payable by him under the Central Sales Tax Act, 1956 (74 of 1956), if any; and
(b) be entitled to claim a refund of any surplus amount and the Commissioner shall deal with the refund claim in the manner described in section 38 and section 39 of this Act.
Explanation.- The dealer may elect to adjust the refund as a tax credit in the next tax period.
[29][11A Tax on goods supplied by contractee
No tax shall be payable under this Act by a contractor on the amount representing the value of the goods supplied by the contractee to the contractor in the execution of works contract in which the ownership of such goods remains with the contractee under the terms of the contract and the amount representing the value of the goods supplied by the contractee to the contractor does not form part of the contract and is not deductible from the amount payable to the contractor by the contractee for the execution of the works contract.]
12 Time at which turnover, turnover of purchases and adjustments arise
(1) Subject to sub-sections (2), (3) and (4) of this section, the amount of the turnover and the turnover of purchases of a dealer which arises during any tax period shall be the amount recorded in the accounts of the dealer where those accounts are regularly and systematically prepared and maintained, give a true and fair view of his dealings, and are employed by the dealer in determining the turnover of the dealer’s business for commercial or income tax purposes.
(2) The Commissioner may by notification –
(a) permit certain classes of dealer to record turnover based on amounts paid or received; and
(b) require certain classes of dealer to record turnover based on amounts payable or receivable.
(3) Where a dealer wishes to change the method of determining the turnover and turnover of purchases, he may only make the change with the consent of the Commissioner and on such terms and conditions as the Commissioner may impose.
(4) The Government may prescribe the time at which a dealer shall treat the –
(a) turnover;
(b) turnover of purchases; and
(c) adjustment of tax or adjustment to a tax credit;
as arising for a class of transactions.
Where a provision in this Chapter is inconsistent with a provision in Chapter II, the provision in this Chapter shall, to the extent of the inconsistency, prevail.
14 Treatment of stock brought forward during transition
(1) Within a period of four months of the commencement of this Act, all registered dealers wishing to claim the credit referred to in sub-section (2) of this section, shall furnish to the Commissioner a statement of their trading stock, raw materials and packaging materials for trading stock (in this section referred to as “opening stock”) which –
(a) is held in Delhi on the date of the commencement of this Act;
(b) was purchased by the dealer after the first day of April 2004;
in such form as may be prescribed.
(2) If –
(a) the dealer has furnished the statement referred to in sub-section (1) of this section;
(b) the opening stock has borne tax under the Delhi Sales Tax Act, 1975 (43 of 1975) at the point specified by the Government under section 5 of the said Act; and
(c) the opening stock has been purchased by the dealer from a registered dealer for such purposes as are specified in sub-section (1) of section 9 of this Act;
the amount of tax borne under the Delhi Sales Tax Act, 1975 (43 of 1975) on such opening stock, determined in such manner and subject to such conditions and restrictions and up to the extent as may be prescribed, shall be credited to the registered dealer as a tax credit under section 9 of this Act:
PROVIDED that no tax credit under this section shall be allowed unless the dealer has in his possession, invoices issued by a dealer registered under the Delhi Sales Tax Act, 1975 (43 of 1975) in respect of the purchases of the said goods:
PROVIDED FURTHER that the dealer shall claim the entire amount of credit to which he is entitled in a single statement, which accompanies a return furnished under this Act.
(3) For the avoidance of doubt, no tax credit under sub-section (2) of this section can be claimed -
(a) for finished goods manufactured out of tax paid raw material or capital goods;
(b) for any goods that were taxable at last point under the Delhi Sales Tax Act, 1975 (43 of 1975) held at the time of the commencement of this Act;
(c) in a statement furnished more than four months after the commencement of this Act; or
(d) for opening stock which is held outside Delhi.
[30][(4) Every dealer wishing to claim a tax credit in excess of one lakh rupees on opening stock shall furnish with the statement a certificate signed by an accountant in the prescribed form certifying that the net credit claim made is true and correct.]
[31][***]
(1) This section applies where –
(a) a registered dealer sells second-hand goods;
(b) the registered dealer has purchased goods from a resident seller who was not registered under this Act;
[32][(c) the goods were purchased either as trading stock for re-sale in an unmodified form or otherwise or as raw material for incorporation or division into trading stock;]
(d) the registered dealer will be liable to tax under section 3 of this Act on the sale of the goods or the goods into which they were incorporated, as the case may be; and
(e) the registered dealer has adequate proof of the amount paid for t