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CA Vinod Kaushik

CA Vinod KaushikIntroduction:

In a move towards GST the Delhi Govt. has issued DVAT amendment rules 2016 on 12-04-2016. These rules have been issued keeping in mind the compatibility which will be required at the time of implementation of GST with effect from a future date which will be known once the constitutional amendment bill is passed in Rajya Sabha. In this article an honest attempt has been made to simplify the main provisions introduced through this amendment bill.

Also Read- GST Enrolment – HSN Codes- Exhaustive List

Concept of item name and item code:

First time like excise a concept of item name and item codes has been introduced in annexure 2a and 2b which are purchase and sale annexure for return forms. Before introduction of these rules a dealer was required to report quarter wise, rate wise and dealer wise sale and purchase information in annexure 2a and 2b. Post amendment now it is mandatory to give item name and code wise, rate wise and dealer wise sale and purchase information which is very difficult for dealers who deals in large number of items like biz bazaar and hyper market .

Illustration explaining the pre- post change for dealers:

The impact of latest amendment made by Delhi VAT rules dated 12-04-2016 has been illustrated by us. Kindly go through this illustration to understand the impact of this amendment.

Practice before amendment (Up to 31-12-2015)

Dealer A purchased goods from B of Rs. 2000 VAT rate is 5%, 12.50%( fruit juice and namkeen) Dealer A purchased goods from B of Rs. 2000 VAT rate is 5% and 12.50% (now item is garments and watches up to 5000) In this case dealer A has to report 2 entries in annexure 2A which is quarter wise dealer wise and rate wise.

Practice after amendment (From 01-01-2016)

Considering the same example as discussed above now dealer A has to report 4 entries in annexure 2A which is very difficult for the Dealers who have 5000 line of item in their industry.

Reporting of PAN by selling dealers:

The selling dealers has to collect PAN of unregistered dealers or buyer of goods whenever theses details has been obtained by the seller in compliance to the provisions of Income Tax Act, 1961. As per rule 114B of Income Tax Rules PAN is mandatory for Purchase/ sale of any goods or services exceeding Rs. 2 lakh per transaction, In case of hotels/restaurants cash payment exceeding Rs.50,000/- and in case of motor vehicles ( except 2 wheeler) all sale and purchase. Objective of this change is to give vital inputs to Income tax department about individuals who make purchase of heavy amount but does not file income tax return.

Mandatory to report GEID of Govt. Departments:

The unique id (GEID) allotted to Govt. department need to be mentioned in respect of sales made to these departments/ organizations. GEID is a unique number allotted to each Govt. entity once they file form GE-I to file form GE-II. After this change is being implemented the mismatch will be generated on the basis of sale shown by seller to Govt. departments and purchase booked by buyers in form GE-II.


The time has come when we are on verge of implementation of GST which is biggest indirect tax reform in indirect taxes since independence. The new GST regime will have concept of HSN code which will be mentioned in invoice and also in the return .The other short term objective of this amendment can be to crackdown those erring dealers which are making purchase of x amount but selling y amount. The cases where heavy mismatch of this kind is observed will be become grounds for enforcement raids and surveys. Till date this change has been made optional for q4 returns and will be mandatory for first quarter return of 2016-2017. Hope this article will give you some clarity on this new phenomena introduced under Delhi Vat. You can email or message me your specific queries during implementation of this change in your accounting software’s I will be happy to reply it as soon as possible.

(Author can be reached  at, +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.

Author Bio

I am a practicing Chartered Accountant specially in area of Indirect Taxation (GST). I have deep interest in understanding the subject and a quick learner. I have been handling litigation, opinion and departmental issues of indirect taxation. I am also pursuing Law from a prestigious institution o View Full Profile

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June 2024