DVAT has introduced a composition scheme for
small dealers whose turnover does not exceed Rs fifty lakh in preceding
financial year and expected turnover of current year does not exceed Rs fifty
lakh to minimize tax burden provided that the condition of turnover during the
preceding year shall not apply to a dealer who commences his business during
the current year.
Applicability w.e.f. : 01st
April 2016
Eligibility to pay tax under this
Scheme:
·
The dealer must be registered
·
The turnover of preceding financial year as
well as current financial year does not exceed 50 lakh.
·
The dealer
is not making sales of any goods other than that of ready to eat foods and non
alcoholic beverages including cooked food, snacks, sweets, savouries, juices,
aerated drinks, tea and coffee etc whether these are provided as indoor service
or outdoor service by hotels/ restaurants/ sweet stalls/ sweet shops/ club/ caterers
or any other eating houses.
Composition Amount: 5% of
entire Turnover
Rate of Tax:
The tax will be paid at the rate specified in section 4 of the Act
on the value of opening stock held on first day of financial year from which he
opts for the scheme.
He shall furnish the detail of such opening stock in form RH 02 with proof of payment of due tax
in form D VAT 20 with his application in form RH 01.
In Case dealers who opts this Composition
Scheme they shall not be entitled for :
a)
Purchasing from or sale to any goods outside Delhi.
b)
For making a purchase from unregistered dealer
except in case of goods specified in First schedule.
c)
For Booking tax credit under section 9 of the Act
and calculating his tax under section 11 of the Act.
d)
For collecting any amount by way of tax under
the Act and for issuing of “Tax invoices”.
Such
dealer is liable to Retain all tax invoices and retail invoices of purchase
made by him and retail invoices issued by him in respect of sales made by him
as required by section 48.
Other Major Points for consideration before
opting for Composition Scheme:
1.
Once a dealer has opted to pay tax under this
scheme, he shall be liable to pay tax under this scheme for the following year
also provided he can opt out from this
scheme subject to :
a)
Condition specified under section 20 of the
act and
b)
Furnishing of intimation regarding withdrawl from this scheme within 30 days from the end
of financial year in form RH 03.
Once
the dealer opts out from this scheme, he can claim credit of tax paid on
opening stock held by him on first day of said following year.
2.
A dealer who apply for a fresh registration
can opt for this scheme by filling application in form RH 01 along with his registration application in form D VAT 04
3.
A dealer who is paying tax under section 3 of
the Act can also opt for this scheme by filling application in form RH 01 within 30 days from the 1st
day of the year for which he wants to opt for this scheme.
4.
The
dealers who are presently covered in general composition scheme as per sub
section 1 to 11 of section 16 and they are also covered in the class of dealers
prescribed in this scheme has to mandatorily withdraw from existing scheme by
filing form DVAT-03 within a period from 1st April 2016 to 30th
April 2016.These dealers can opt for the new scheme as per above procedure but
it is not mandatory, If these classes of dealers are not interested in
composition scheme can file returns as per normal procedure
5.
The Tax period will be quarterly unless
otherwise prescribed by commissioner for a dealer or class of a dealer.
6.
The tax paid by dealer shall not be adjusted
at any stage against the liability of dealers to pay tax under section 3 of the
act for a period other than the period for which dealer is liable to pay tax
under this scheme.
7.
If turnover exceeds Rs. 50,00,000 at any time
during the financial year:
·
He shall be liable to pay tax under section 3
of the Act
·
He shall be liable to furnish intimation in
form RH 03 within 7 days from which
turnover exceeds Rs. 50,00,000
·
He shall be entitled to claim credit of Input
Tax paid on Opening Stock held by him in
Delhi on such day
8.
A dealer who has defaulted to pay tax under
this scheme for two consecutive period,
·
Shall be liable to pay tax under section 3 and
cease to pay tax under this scheme immediately from the 1st day of
latter tax period from the period for which he has committed default.
·
He shall be liable to furnish intimation in
form RH 03 within 7 days after the
end of due dates specified.
·
He shall be entitled to claim credit of Input Tax
paid on Opening Stock held by him in
Delhi on such day
9.
All the provision which are not contrary to
this scheme shall apply to every dealer who is opting to this scheme.
10.
In case of failure to comply with the
condition mentioned in the scheme or at a later stage is found that he was not
eligible for the scheme, all the provision of the Act including the liability
to pay tax under section 3 along with interest for delay shall apply mutatis
mutandi as if he was not covered under the scheme.
Contributed By CA Shalu Gupta from Sandeep Ahuja & Co
