FAQ on Delhi VAT Amnesty Scheme (comprising voluntary disclosure and disputes settlement introduced with effect from 20.09.2013

Q1. What is DCS under the Delhi VAT?

DCS is a “Scheme” notified under the Delhi Value Added Tax Act, 2004 (DVAT Act), which draws powers from newly inserted section 107 under the Act with effect from 12.9.2013. Notification is annexed in Appendix A. The section 107 reads as, ‐

“107. Amnesty Scheme(s) ‐ Notwithstanding anything to the contrary contained in this Act and Rules thereto, the Government may by notification in the official Gazette, notify amnesty scheme(s) covering payment of tax, interest, penalty or any other dues under the ‘Act’, which relate to any period ending before 1st day of April, 2013, and subject to such conditions and restrictions as may be specified therein, covering period of limitation, rates of tax, tax interest, penalty or any other dues payable by a class of dealers or classes of dealers or all dealers.”

Purpose of this Scheme is two fold:

(i) To achieve the self compliances by the dealer: Dealer (including trader, manufacturer, works contractor, builder, leasing company, etc.) or any other person, such as contractee, (hereinafter referred as “declarant”), who has not paid due taxes under the DVAT Act or under the Central Sales Tax Act, 1956 (CST Act, in short) as specified in the respective Statute, may pay tax under DCS. Further, the time of default is immaterial for the purpose of this Scheme; and

(ii) To resolve disputes: Where dispute in relation to tax, interest and penalty is pending before any higher forum, such as the Objection Hearing Authority, the DVAT Tribunal, the Delhi High Court or the Supreme Court, the declarant may resolve his dispute under this Scheme by paying tax and interest stated in the assessment order. He will get immunity from payment of interest from the date of order till the date of declaration, and penalty in relation to such tax. The dispute might pertain to the DVAT Act, CST Act, or the erstwhile repealed Acts, that is, the Delhi Sales Tax Act, 1975 or the Delhi Sales Tax on Works Contract Act, 1999 or the Delhi Sales Tax on Right to Use Goods Act, 2002 or the Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994.

General Scheme of the DCS:

(i) Where assessment order/notice of assessment has not been issued, the

declarant shall pay only tax; and he will get immunity from interest, penalty and prosecution, and

(ii) Where the order/notice has been issued by the Department, the declarant shall pay tax and interest as stated in such order/notice. He will get immunity from payment of interest from the date of notice till the date of declaration, penalty and prosecution under the Act.

Q2. Who can declare tax dues under DCS?

As per Clause 2(1)(d) of the DCS, following persons may declare their tax dues:‐

(i) Dealers not registered under the Delhi VAT Act and/or CST Act;

(ii) Dealers registered under the Delhi VAT Act and/or CST Act and assessment of tax in respect of tax dues has not been made;

(iii) Dealers registered under the Delhi VAT Act and/or CST Act and assessment of tax in respect of tax dues, with or without penalty, has been made;

(iv) Persons, who were liable to deduct tax at source under section 36A of the Act, but failed to deduct TDS as specified.

(v) Dealers, who were registered under the erstwhile Delhi Sales Tax Act, 1975 or the Delhi Sales Tax on Works Contract Act, 1999 or the Delhi Sales Tax on Right to Use Goods Act, 2002 or the Delhi Tax on Entry of Motor Vehicles into Local areas Act, 1994, and their disputes/objections/appeals for the period up to 31.3.2005 are pending before any higher forum.

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