CA Vinod Kaushik

CA Vinod Kaushik

Introduction:

The introduction of form DS-2 was an important step taken by Delhi Govt. few months back to curb the practice adopted by some tax evaders. The level of pollution has grown manifold in last year but the collection of taxes especially VAT is 40% short of its annual target of Rs. 24000 crores. In last months of financial year it is normal practice of VAT department to go for collection, conduct raids and searches which causes hardship to the honest taxpayers which are paying their due taxes on time. The Govt. is also not completely wrong in doing so because Delhi is a consumption State with trading hub like chandani chowk still it cannot achieve its annual targets. In this article discussion is done on steps taken by Govt. to curb the malpractice adopted by certain tax evaders and documentation which is necessary to prevent unnecessary hurdles.

Inspection of vehicles at entry points:

The collection of VAT till date is below its targets despite introduction of form DS-2 which contains the information about goods, its rate of tax and destination. As per the news published in Times of India 10000 vehicles has been inspected in December 2015 which resulted in raising penalty of Rs. 50000 in 783 cases. The penalty is normally raised under section 86 various sub section for not carrying the desired documents like form DS-2, GR copy and other relevant documents.  In past three months 539 vehicles have been detained and tax of Rs. 3 crores has been realized from them which were illegally carrying goods. The department has started installing number plate reading cameras at various entry points in Delhi which will capture the information of various number plates and send it to the department server. The above said information will help them to detect the cases where form DS-2 has not been filed i.e. illegal entry of goods into territory of Delhi.

Penalty Provisions under Delhi VAT:

Basically two types of penalty can be levied on erring dealers for not carrying proper documents as per recent notification of department. A residual penalty of Rs. 50000 can be levied under section 86(19) for not carrying complete documents and another penalty which is 20% of value of goods which has been reduced from 40% of value of goods. Section 3 of Delhi VAT makes transporters deemed dealer if they are not able to explain the source and destination of goods. The goods will be assumed to be related to transporters and penalty and taxes will be recovered accordingly.

What are the proper documents?

The owner, driver or person in charge of a goods vehicle shall carry with him such documents as prescribed by the department and need to produce the same before any officer authorised for such purposes by the Commissioner. As per rule 43(1) of VAT rules following important documents need to be carried by the transporter along with the goods.

  • Goods transport receipt in form DVAT-32 ( GR must contain all the particulars of dvat-32)
  • Sale invoice or delivery note in form DVAT-33.
  • Export declaration in form DVAT-34. ( Yet to be notified by the commissioner)
  • Import declaration in form DVAT 35. ( Yet to be notified by the commissioner)
  • Transit slip in form DVAT-35A if goods are intended to be transit through Delhi (Yet to be notified by the commissioner).
  • Form DS-2 hard copy or soft copy as the case may be. ( Notified by the commissioner vide notification dated 08-01-2016)

This requirement of documents must be fulfilled invariably otherwise vehicle can be intercepted by various teams deployed on borders and a penalty of Rs. 50000 can be levied u/s 86(19) and further penalty of 20% of value of goods for evading taxes.

Conclusion:

The collection of VAT department is short of its budgeted targets which was 24000 CR and it has collected just Rs. 14720 crore till first week of January 2016 and need to collect the balance 9280 crores in just 2-3 months. The raids and searches has been started by department and interception of vehicles has grown manifold and recently the department has impounded 250 cases of tax evasion out of which 2 crores of tax and penalty has been realized from their owners. A large amount of liquor, gutka, auto parts and readymade garments are imported into Delhi without proper documents. The dealers must take into account the important documents which need to be carried with the goods along with form DS-2 which is mandatory for all dealers irrespective of their turnover.

(Author can be reached  at cavinodkumar67@gmail.com, +91-9953236278)

Disclaimer: Views expressed are strictly personal. The content of this document are solely for informational purpose. It doesn’t constitute professional advice or recommendation. The Author does not accept any liabilities for any loss or damage of any kind arising out of information in this article and for any actions taken in reliance thereon.

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