Where a dealer has
purchased goods intended to be used for the purposes specified in
sub-section (1) of
section 9 and the goods are subsequently used fully or partly for other
purposes as specified in sub-section (4) of section 9 or the goods or goods
manufactured out of such goods are exported from Delhi by way of transfer, the
tax credit claimed shall be reduced under section10, in the following manner:-
(i) in case
commodity-wise accounts are maintained by the dealer clearly correlating use of
goods for making
sales under sub-section (1) of section 9 and for other purposes, the tax credit
shall be reduced by
the amount of input tax paid on the purchases used for such other purposes.
(ii) in case
commodity-wise accounts are maintained by the dealer clearly correlating use of
goods for making
sales referred in sub-section (1) of section 9 and for transfer of goods or
goods manufactured out of such goods, the tax credit shall be reduced in the
manner specified in rule 7.
(iii) in case
commodity-wise accounts are not maintained by the dealer clearly correlating
use
of goods for making
sales referred to in clause (i) above, the reduction of tax credit shall be
calculated on the
basis of the purchase price of such goods immediately preceding their use for
other purposes or
their fair market value, whichever is higher.
(iv) in case
commodity-wise accounts are not maintained by the dealer clearly correlating
use
of goods for making
sales referred to in clause (ii) above, the reduction of tax credit shall be
calculated on the
basis of the purchase price of such goods immediately preceding to their
transfer or their
fair market value, whichever is higher, and the input tax credit shall be
reduced in the manner specified in rule 7.
Restriction and conditions governing tax
credit
(2) Before allowing
the claim of input tax credit to a dealer, the assessing authority may
satisfy itself that
the conditions laid down in clause (g) of sub-section (2) of section 9 of
the Act are also
satisfied.
(3) The provisions of
sub-section (5) of Section 10 of the Act relating to proportionate
reduction of tax
credit on purchases of goods sold at a price lower than the purchase
price shall apply to
the cases where, during the tax period, the dealer receives credit
note or notes from
the selling dealer on account of discount, commission, rebate,
remission in price or
incentive, or by whatever name called. Explanation – For the removal of doubt,
it is hereby clarified that the provisions of subsection (5) of section 10 of
the Act shall not apply to a case where in the ordinary course of business the
goods are sold by a dealer at a loss.
(4) In the cases
where the sale has been made at price lower than the purchase price in
pursuance of the
administered prices of the oil companies, that is to say, Indian Oil
Inserted
vide No.F.3 (23)/Fin.(T&E)/2009-10/jsfin/287, dated 1.4.2010, w.e.f.
1.4.2010. Omitted
vide notification No.F.3 (23)/Fin(Rev-I)/2011-12/DSIII/68, dated 27.01.2012,
w.e.f 27.01.2012.Earlier
inserted vide notification No.F.3(23)/Fin(T&E)/2009-10/jsfin/287, dated
1.4.2010, w.e.f. 1.4.2010
and
read as, “(1) For the purpose of working out the entitlement of tax credit
under sub-section (1) of section
9 of the Act to the extent of proportion of the goods which have been put to
sale during the tax period,
the input tax credit on the closing stock available with the dealer at the end
of every tax period shall be carried forward to the next tax period or the
following tax period or periods, as the case may be, till such stock is sold by
the dealer PROVIDED that this sub-rule shall not prevent the claim of refund of
a dealer for sales already effected during the relevant tax period or to a
dealer who makes sales in the course of exports out of India, or in the course
of inter-State trade and commerce, or, in such cases where the dealer being a
manufacturer is required to make purchases of raw materials taxable at a higher
rate of tax, while the sales of goods manufactured by him (not being goods
exempt under section 6 as specified in First Schedule to the Act) are taxable
at the lower rate under the Act.”- Corporation,
Hindustan Petroleum Corporation Ltd. and Bharat Petroleum Corporation Ltd., the provisions
of Section 10(5) shall not apply).
Reduction of tax credit
(1) For the purposes
of sub-section (6) of section 9 and sub-section (3) of section, the tax credit
shall be reduced by
the following prescribed percentages:-
(a) in the case of
goods specified in the Second Schedule 100 percent
2[b
in the case of goods specified in the Third Schedule 40 percent
(c) in the case of
goods specified in the Fourth Schedule 10 percent
(d) in the case of
any other goods specified in clause (e) of
sub-section (1) of
section 416 percent.3[(e)
(2) Where a dealer
has transferred any goods in the circumstances specified under subsection
(6) of section 9 and
has made a reduction of tax credit by the prescribed percentage, he
shall be entitled to
claim the tax credit so reduced when he brings such goods back into Delhi for
sale on which tax is payable under section 3 or for sale in the course of inter-State
trade or
commerce or for sale
outside Delhi or for sale in the course of exports out of the territory of
India, subject to the condition that the goods brought back to Delhi are the
same goods as originally transferred 4[or
the goods processed or manufactured out of the goods as originally
transferred.]
(3) Where any goods
or goods manufactured out of such goods are lost or destroyed, the dealer
shall not be eligible
to claim tax credit on such goods and the credit taken in any earlier tax period
shall be reversed in the tax period in which goods are claimed to have been
lost or destroyed.
(4) For the purpose
of sub-section (9) of section 9, the prescribed percentage of reduction of
tax credit shall be5 [2 percent
Adjustment
to tax
substituted vide
Notification No.F.3(10)/Fin.(T&E)/2008-09/jsfin/351, dated 24.7.2008, w.e.f.1.6.2008.
Percentage effected from 14.5.2007 to 31.5.2008:- 1. For the purposes of
subsection
(6) of section 9 and
sub-section (3) of section 10, the tax credit shall be reduced by the
following prescribed
percentages:-
(a)
in the case of goods specified in the Second Schedule 100 percent
(b)
in the case of goods specified in the Third Schedule 75 percent
©
in the case of goods specified in the Fourth Schedule 15 percent
(d)
in the case of any other goods specified in clause (e) 24 percent
of
sub-section (1) of section 4
Earlier this sub-rule
was substituted vide Notification No.F.3(2)/Fin.(T&E)/2007-
08(iv)/dsfte/353,
dated 14.5.2007, w.e.f. 14.5.2007. Percentage effected from 1.4.2005 to
13.5.2007:- (1) For
the purposes of sub-section (6) of section 9 and sub-section (3) of section 10,
the
tax credit shall be
reduced by the following prescribed percentages:-
(a)
in the case of goods specified in the Second Schedule 100 percent
(b)
in the case of goods specified in the Third Schedule 100 percent
(c)
in the case of goods specified in the Fourth Schedule 20 percent
(d)
in the case of any other goods specified in clause (e) 32 percent
of
sub-section (1) of section 4
Substituted
vide Notification No.F.3(27)/Fin.(T&E)/2009-10/jsfin/195, dated 17.3.2010,
w.e.f.
17.3.2010,
earlier read as:-
(b)
in the case of goods specified in the Third Schedule 50 percent”.
3 omitted vide Notification No.F.3(23)/Fin.(Rev-I)/2011-12/DSIII/68,
dated 27.1.2012 w.e.f. 27.1.2012.
Earlier
inserted vide Notification No.F.3(27)/Fin.(T&E)/2009-10/jsfin/195, dated
17.3.2010, w.e.f.
17.3.2010
and read as:-
(e)
declared goods, as defined from time to time in section 14 of the Central 50
percent]
Sales
Tax Act, 1956(74) of 1956)” Inserted
vide notification No.F.3(59)/Fin(T&E)/2005-06/923 kha, dated 30.11.2005,
w.e.f. 30.11.2005
Substituted
for the word and figure “3 percent”vide
No.F.3(10)/Fin.(T&E)/2008-09/jsfin/351, dated
24.7.2008,
w.e.f. 1.6.2008. Earlier substituted for the word and figure “4 percent” vide
No.F.3(2)/Fin.(T&E)/2007-08/dsfte/353,
dated 14.5.2007, w.e.f. 14.5.2007.
Where adjustment of
tax arises under clause (e) of sub-section (1) of section 8 by reason
of the whole or part
of the price owed by the buyer for the purchase of goods having been written off
by the dealer as bad debt, the dealer shall make such adjustment to the extent
of the tax on the price written off as bad debt provided such price has been
written off in his books of accounts and the price so written off has also been
claimed by the dealer as deduction under section 36 of the Income Tax Act, 1961
(43 of 1961):
PROVIDED that where
the price so written off relates to the sale of goods taxable at
different rates of
tax specified under section 4, the adjustment shall be made by allocating the
price so written off
to various amounts outstanding in the following order:-
(i) any interest
amount due and outstanding;
(ii) sale price of
any exempt goods;
(iii) sale price of
goods taxable at the rate of 1 percent;
(iv) sale price of
goods taxable at the rate of 1[
5 percent;
(v) sale price of
goods taxable at the rate of 12.5 percent; and
(vi) sale price of
goods taxable at the rate of 20 percent
PROVIDED FURTHER that
where the price so written off is recovered subsequently
either in whole or
part, it shall be deemed to be the sale of goods by him in the tax period in
which such price is
recovered and the dealer shall make an adjustment in calculating the tax
payable for the same
tax period by allocating the recovered amount to the amounts stated above in
the reverse order
Adjustment of tax due to retrospective
reduction of tax liability by virtue of the Delhi
Value Added Tax (Second Amendment) Act, 2005
A dealer, in
consequence of the retrospective operation of –
(a) the reduced rates
of tax on the turnover pertaining to declared goods involved in the
execution of works
contracts and the works contracts which are in the nature of printing works in
accordance with the
provisions of section 4; or
(b) the eligibility
to claim input tax credit on purchase of second hand goods from the
resident seller under
sub-section (2) of section 15; or
(c) the discharge of
tax liability on works contracts in accordance with the provisions of
subsection
(4) of section 105,
shall re-compute his
tax liability and shall make adjustments on account of excess
amount of tax
deposited under the Act, if any, in the first return which is due to be filed
after the
date of notification
of the Delhi Value Added Tax (Fifth Amendment) Rules, 2005 PROVIDED that the
dealer shall not make the adjustments of the excess amount of tax deposited unless such
excess amount has been refunded to the purchaser PROVIDED FURTHER that
the dealer shall submit the proof of the amount so refunded to the purchaser
along with his return mentioned above.
Treatment of stock brought forward during transition
For the purposes of
sub-section (2) of section 14, the amount of tax borne shall be–
(a) where the dealer
holds an invoice issued by a dealer registered under the Delhi Sales Tax
Act, 1975 (43 of
1975) in respect of the opening stock which separately states the amount of tax
paid under the Delhi
Sales Tax Act, 1975 (43 of 1975) at the point specified under section 5 of
the said Act, the
amount of such tax as is allocable to the opening stock; or
(b) in any other
case, an amount calculated according to the formula-
F x P x 75%
1 Substituted for the figure and word “4 percent” vide No.F.3(23)/Fin(Rev-I)/2011-12/DSIII/68,
dated
27.01.2012,
w.e.f. 27.01.2012.
2 Inserted vide notification No.F.3(59)/Fin(T&E)/2005-06/923
kha, dated 30.11.2005, w.e.f. 30.11.2005
3For the dealers having monthly tax period, time was extended upto
the time of filing of the return for the
month
of December, 2005 vide Order No.F.3(17)/P-II/VAT/Misc./2005/1211 dated
03.01.2006.
4
where –
F = the tax fraction,
(r/r+100) [where ‘r’ is the rate of tax under the Delhi Sales Tax
Act, 1975 (43 of
1975) applicable as on March 31, 2005 to the opening stock]
P = the price paid
for the opening stock.
Credit on second hand goods purchased by a registered dealer from a resident
seller not
registered under the Act
(1) No input tax
credit shall be claimed on second hand goods purchased by a registered
dealer from a
resident seller who is not registered under the Act, unless the registered
dealer has in his possession adequate proof of the amount paid for such goods
in the form of an invoice or receipt signed by such a resident seller
containing the following, namely -
(a) the description
of the goods;
(b) the amount paid
for the goods;
(c) the name and
address of the resident seller; and
(d) the Permanent
Account Number (PAN), if any, of the resident seller.
1[(2)
No input tax credit shall be claimed under section 15 by a registered dealer on
purchase
of second hand goods
unless the dealer has in his possession original invoice or cash memo
issued under the Act
or under the Delhi Sales Tax Act, 1975 (43 of 1975) (since repealed) for
purchase of said
goods in Delhi by the resident seller.]
Document for availing of credit
(1) A dealer
requiring to furnish statement of trading stock and raw material under clause
(c)
of sub-section (1) of
Section 20 shall furnish the same in Form DVAT 19 within 7 days of his registration
taking effect.
(2) No input tax
credit shall be allowed on the trading stock or raw materials held by a dealer
who is registered or
re-registered at the time when such registration or re-registration takes
effect, unless the
dealer has in his possession adequate proof of the amount of input tax paid in
the form of a tax
invoices issued by a registered dealer to the dealer claiming the tax credit.
Substituted
vide notification No.F.3(59)/Fin(T&E)/2005-06/923 kha, dated 30.11.2005,
w.e.f. 30.11.2005,
earlier
read as, “(2) No input tax credit shall be claimed on second hand goods under
section 15 without
production of original tax invoice.”
Get Sudycafe's Updates by SMS
in your mobile by Following below two Steps:
2. Send a SMS, Type: JOIN CASTUDYCAFE &
send to 9219592195
This Article is written by CMA
Samir Biswal. He can be reached at cmasamirbiswal@gmail.com
Subscribe to Studycafe by Email
Subscribe to our mailing list to get the updates to your email inbox.. Just Enter your email id below and click on subscribe button! After that, verify it through the verification email received on your email id and start learning more!..
Posts
0 comments:
Post a Comment