GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI
DEPARTMENT OF TRADE AND TAXES
VYAPAR BHAWAN, I.P. ESTATE, NEW DELHI-110 002
CIRCULAR NO 08 of 2016-17
Subject: New Composition Scheme for Restaurants and Halwais
A new Composition Scheme under section 16(12) of the DVAT Act was recently introduced vide notification No. F.3(29)/Fin.(Rev-l)/2015-16/dsvi/93 dated 18/03/2016, wherein the registered dealers whose annual turnover is upto ₹ 50 Lakh and who make sales of cooked food, snacks, sweets, savouries, juices, aerated drinks, tea and coffee etc. (i.e. who are engaged in restaurants/halwai business) were given an option to pay composition tax @ 5% w.e.f. 1st April, 2016. In view of the second proviso to section 16(1), such dealers, who were earlier opting composition @ 1% under section 16 (1) were mandatorily required to opt out of the composition w.e.f. 1st April, 2016 by filing Form DVAT-03 upto 30th April, 2016 and to pay tax as a non-composition dealer as per the provisions of the DVAT Act or to opt to the new Composition scheme @ 5% by filing Form RH-01 alongwith the Form DVAT-03 (for withdrawal of composition @ 1%) upto 30th April, 2016. A dealer engaged in restaurant/ halwai business who is still continuing with composition @ 1% under section 16(1) after 31st March, 2016 is not only liable to pay due tax as per the rates specified in section 4 of the DVAT Act as a non-composition dealer but also liable to pay penalty under section 86(24) for contravening the provisions of the DVAT Act.
Therefore, in view of above, all Zonal Addl. Commissioner/Jt. Commissioners and also the Ward VATOs/ AVATOs are hereby directed to ensure that no such dealer (engaged in restaurant/halwai business) is continuing with composition of tax @ 1% under section 16(1) after 31st March, 2016 and if found so appropriate action against such dealers for recovery of due tax and penalty may be initiated as per the statutory provisions of the DVAT Act.
This issues with the approval of Commissioner, VAT.