The Delhi Assembly on Friday, 30th July, 2021, passed the Delhi Goods and Services Tax (Amendment) Bill, 2021, which the government claimed is aimed at smoothening the taxpaying process, strengthening accountability and minimizing room for tax evasions.

Small changes have been made in 15 sections of the Delhi GST Act. These have been incorporated on the basis of experiences and feedback from traders.

Now let’s have a look at the amendments and their consequent effects:

Sr. No. Amendment Effect
1 Insertion: after clause (a) of Section 7(1)

Effective date: Deemed to have been inserted w.e.f. 1st July, 2017

(aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice- versa, for cash, deferred payment or other valuable consideration.

Explanation: For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another.

The aim of bringing this amendment into effect is to cover in the ambit of supply, activities or transactions involving supply of goods or services by any person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration, so as to ensure levy of tax on the same.

With the help of explanation, it is also clarified that a person or its members or constituents shall be deemed to be two separate persons for the purpose of supply.

2  Insertion: after clause (a) of Section 16(2) (aa) the details of the invoice or debit note referred to in clause (a) has been furnished by the supplier in the statement of outward supplies and such details have been communicated to the recipient of such invoice or debit note in the manner specified under section 37. The aim of bringing this amendment into effect is to provide that ITC on invoice or debit note may be availed only when the details of such invoice or debit note has been furnished by the supplier in GSTR-1 and is communicated to the recipient.
3 Omission: Section 35(5)

Omission of:

(5) Every registered person whose turnover during a financial year exceeds the prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant and shall submit a copy of the audited annual accounts, the reconciliation statement under sub-section (2) of section 44 and such other documents in such form and manner as may be prescribed.

With the advent of this amendment, the requirement of compulsory submission of audited annual accounts and reconciliation statements for the registered taxpayers is removed.
4 Substitution: Section 44

44. Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:

Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filing annual return under this section:

Provided further that nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor- General of India or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.

The aim of this amendment is to get in line with the amendment of section 35(5) so as to remove the mandatory requirement of furnishing a reconciliation statement duly audited by specified professional and to provide for filing of the annual return on self-certification basis.
5 Substitution: Section 50(1) proviso Effective date: Deemed to have been inserted w.e.f. 1st July, 2017

Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be payable on that portion of the tax which is paid by debiting the electronic cash ledger.

To charge interest on net cash liability.
6 Substitution: Section 74 Explanation 1 clause (ii)

for the words and figures sections 122, 125, 129 and 130, the words and figures sections 122 and 125shall be substituted.

The aim of this amendment is to make seizure and confiscation of goods and conveyances in transit a separate proceeding from the recovery of tax.
7 Insertion: Section 75(12)

Explanation: For the purposes of this sub-section, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.

8 Substitution: Section 83(1)

(1) Where, after the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV, the Commissioner is of the opinion that for the purpose of protecting the interest of the Government revenue it is necessary so to do, he may, by order in writing, attach provisionally, any property, including bank account, belonging to the taxable person or any person specified in sub-section (1A) of section 122, in such manner as may be prescribed.

The aim of this amendment is to provide that provisional attachment shall remain valid for the entire period starting from the initiation of any proceeding under Chapter XII, Chapter XIV or Chapter XV till the expiry of a period of 1 year from the date of order.
9 Insertion: Section 107(6) proviso

Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a sum equal to twenty-five per cent of the penalty has been paid by the appellant.

10 Substitution: Section 129(1)(a) & (b)

(a) on payment of penalty equal to two hundred per cent of the tax payable on such goods and, in case of exempted goods, on payment of an amount equal to two per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods comes forward for payment of such penalty;

(b) on payment of penalty equal to fifty per cent. of the value of the goods or two hundred per cent of the tax payable on such goods, whichever is higher, and in case of exempted goods, on payment of an amount equal to five per cent of the value of goods or twenty-five thousand rupees, whichever is less, where the owner of the goods does not come forward for payment of such penalty.

(a) Owner of the goods comes forward for payment of such penalty: The amount of penalty in case of goods other than exempted goods is increased from 100% to 200% of tax payable on such goods.

(b) Owner of the goods does not come forward for payment of such penalty: The amount of penalty in case of goods other than exempted goods is changed from 50% of value of such goods to 50% of value of such goods or 200% of tax payable on such goods, whichever is higher.

It is also to be noted that earlier even the applicable tax was payable in addition to the penalty to release the said goods and documents relating to such goods and conveyance.

11 Omission: Section 129(2)

Omission of:

(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention and seizure of goods and conveyances.

12 Substitution: Section 129(3)

(3) The proper officer detaining or seizing goods or conveyance shall issue a notice within seven days of such detention or seizure, specifying the penalty payable, and thereafter, pass an order within a period of seven days from the date of service of such notice, for payment of penalty under clause (a) or clause (b) of sub-section (1).

Earlier, the period of issuance of notice and passing of order was not prescribed.
13 Substitution: Section 129(4) for the words No tax, interest or penalty, the words No penalty shall be substituted.
14 Substitution: Section 129(6)

(6) Where the person transporting any goods or the owner of such goods fails to pay the amount of penalty under sub-section (1) within fifteen days from the date of receipt of the copy of the order passed under subsection (3), the goods or conveyance so detained or seized shall be liable to be sold or disposed of otherwise, in such manner and within such time as may be prescribed, to recover the penalty payable under sub-section (3):

Provided that the conveyance shall be released on payment by the transporter of penalty under sub-section (3) or one lakh rupees, whichever is less;

Provided further that where the detained or seized goods are perishable or hazardous in nature or are likely to depreciate in value with passage of time, the said period of fifteen days may be reduced by the proper officer.

The word tax is deleted to bring this provision in line with amendment of section 129(1)(a) & (b) also the period of 7 days is increased to 15 days.

Also, a proviso is added to provide for release of conveyance by the transporter on payment of penalty under sub-section (3) or ₹1 lakh, whichever is less.

15 Substitution: Section 130(1) for the words Notwithstanding anything contained in this Act, if, the word “Whereshall be substituted. The overriding effect of section 130 is taken away.
16 Substitution: Section 130(2) second proviso for the words, brackets and figures “amount of penalty leviable under sub-section (1) of section 129”, the words “penalty equal to hundred per cent of the tax payable on such goods” shall be substituted. To delink the proceedings under section 130 with section 129.
17 Omission: Section 130(3)

Omission of:

(3) Where any fine in lieu of confiscation of goods or conveyance is imposed under subsection (2), the owner of such goods or conveyance or the person referred to in sub-section (1), shall, in addition, be liable to any tax, penalty and charges payable in respect of such goods or conveyance.

18 Substitution: Section 151

The Commissioner or an officer authorized by him may, by an order, direct any person to furnish information relating to any matter dealt with in connection with this Act, within such time, in such form, and in such manner, as may be specified therein.

The aim of this amendment is to empower the jurisdictional commissioner to call for information from any person relating to any matters dealt with in connection with the Act.
19 Omission, Substitution: Section 152(1)

i. the words of any individual return or part thereof shall be omitted.

ii. after the words any proceedings under this Act, the words without giving an opportunity of being heard to the person concerned shall be inserted;

The aim of this amendment is to provide that no information obtained under sections 150 and 151 shall be used for the purposes of any proceedings under the Act without giving an opportunity of being heard to the person concerned.
20 Omission: Section 152(2)

Omission of:

Except for the purposes of prosecution under this Act or any other Act for the time being in force, no person who is not engaged in the collection of statistics under this Act or compilation or computerization thereof for the purposes of this Act, shall be permitted to see or have access to any information or any individual return referred to in section 151.

21 Omission, Substitution: Section 168(2)

i. for the words, brackets and figures sub-section (1) of section 44, the word and figures section 44 shall be substituted.

ii. the words, brackets and figures “sub-section (1) of section 151,” shall be omitted.

The aim of this amendment is to enable the jurisdictional commissioner to exercise powers under section 151 to call for information.
22 Omission: Schedule II paragraph 7 Effective date: Deemed to have been inserted w.e.f. 1st July, 2017

Omission of:

The following shall be treated as supply of goods, namely:

Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration.

To bring the provisions in line with the amendment made in section 7.

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Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.

The author can also be reached at [email protected].

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