CA Vinod Kaushik

CA Vinod Kaushik


As you all know the first regular budget of Delhi was presented on 25-06-2015 by Finance Minister Mr. Manish Sisodia and there were so many announcements related to state taxes like VAT, Luxury tax, Entertainment tax and a tax on commercial goods vehicle entering Delhi. In Industry as well as small Dealers are not sure when these budget changes will be applicable on them which has impact on invoices raised by them. In this article I have made a small effort to decode the legal positions of Bills, amendment bills passed by Delhi Assembly and there date of implementation. Before you read further I would like to clarify that this article contains my personal view and not of my firm to which I belongs.
Lt. Governor vis- a-vis Delhi Assembly

Delhi has not got full statehood like other states which has full autonomy in their decision making and financial powers and the Governor house does not intervene in their daily administrative decisions like Delhi is facing now a day. The Lt. Governor hereinafter referred as LG plays a very significant and constitutional role in administration of Delhi with State Assembly.

A copy of every bill once it is introduced in the assembly is being sent by secretary to the LG and the president of India for their information. Once the bill is passed by the Assembly a copy signed by the Speaker is sent to LG for his assent. If the LG deems necessary he may return the bill to Assembly with a specific message that all or some portion of the bill should be reconsidered by the Assembly.

Special Powers of LG with respect to Financial Bills

The Delhi Government cannot introduce any Finance bill in Delhi Assembly unless it is recommend by LG on the following matters:

  1. Imposition, remission and alteration of any TAX
  2. Matters which will put extra burden on consolidated funds of Delhi Govt.
  3. Matters which will allow appropriation of money out of consolidated Funds of Delhi Govt.

Looking at the above powers the elected Govt. of Delhi cannot take decisions related to its Income and expenditure without prior approval of LG.

Process of bills becoming Law in Delhi

Once a bill has been passed by Assembly a signed copy of the same shall be sent to LG for its assent and LG if deems necessary that bill is in the public interest may assent the bill and it will become law after the formalities of gazette notification. But in case of financial bills the LG has been empowered to hold the bill for consideration of president and in case the bill has not been assented then it can become the law.

Status of changes proposed in Budget session:

The budget proposals after being introduced by Finance Minister on 25-06-2015 on the floor of house were discussed in the house on 29-06-2015 and on 30-06-2015. As per my observations and extensive search on the Delhi Legislative Assembly web page the Finance bill was passed in the house till the last date of the budget session. Now the proposal shall be sent to LG for its assent and at last if LG gives its assent it will be notified vide Gazette notification and will become part of the Law.

Delhi VAT (2nd Amendment) Bill, 2015

The Delhi Govt. other then proposing downward change in VAT rates on wood, wax and cutlery items has also proposed a numbers of changes in DVAT Act, 2004 vide this amendment bill on 29-06-2015. The bill contains a numbers of changes related to VAT Act and which shall be discussed in a separate article. The bill was discussed in the house on 30-06-2015 clause by clause and was passed with voice vote and sent to LG for its assent.


We expect from the Lt. Governor that bills should be passed by him as soon as possible so that business in the city can be made more user friendly. Ease of doing business is a great idea by Mr. Modi but LG has to implement this by giving timely assent to the bills.

(Author can be reached  at, +91-9953236278)

Disclaimer: Views given in the article are personal and based on the law as on date .Before taking any action on the basis of this article kindly cross check the relevant section and rules.

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