CA Vinod Kaushik

CA Vinod Kaushik


This article has been written to give you clarity on the implication of DVAT (3rd Amendment) Bill, 2015 which was introduced in the Delhi Legislative Assembly on 04th day of December 2015 and after discussion on the floor of the house was passed on the same date. The implication of the above said bill has been discussed in detailed in this article clause by clause.

Amendment of Section 3:

In Delhi Value Added Tax Act, 2004 in section 3 after subsection (10), subsection (11) has been inserted to make provision for deposit of advance tax in case of import of goods from a place outside India. The Govt. thinks Importers are evading taxes by not reporting sales in their books of accounts resulting in loss to exchequer. The provisions introduced will put a cap on evasion of taxes by importers as they have to deposit advance tax and claim the credit of same while making monthly payment. The Govt. may exempt certain class of dealers and goods for application of this provision to avoid hardship to trade and industry.

Amendment of Section 29:

The Govt. is planning to discourage submission of hardcopy of form DVAT-56 to promote digital India and to make the process paperless. Currently the dealers normally rush on last date to submit their return which causes chaos in department premises. This is a welcome change provided system smoothness is ensured before implementing this provision.

Insertion of Section 50A:

Communication of information of sale invoice instantly by installing such physical device or software as notified by the Government. The objective of this provision is to ensure that dealers do not manipulate the sales data afterwards. In the proposed GST regime, business organization will submit their sales data to Govt. invoice wise. The only concern is to ensure hassle free website and these provisions must be prescribed for big dealers.

Amendment of Section 89:

In the principal Act, section 89 sub section (1), (2),(3),(4),(5) and (6) has been amended to make the provision more deterrent by increasing penalty for potential offenders. The fine has been increased to the amount of tax deficiency or Rs. 50000 whichever is higher but not exceeding 4 times of amount of tax deficiency involved. The imprisonment has been extended depending on the amount of tax evasion involved under subsection 3 which may vary from 3 months to 6 years as the case may be. Under sub-section 6 the amount of penalty has been increased from Rs. 100 to 500 per day.

Insertion of Section 91A:

The proposal for insertion of new section 91A is to make enabling provisions for setting up of Special Courts for speedy trials of the offences. The provisions once notified will empower Govt. to setup such courts after consultation with Chief justice of Delhi High Court.

Amendment of Section 92:

The proposed amendment of section 92 aims to empower investigation under the Indian Penal Code, 1860 where commission of an offence under the Delhi Value Added Tax Act, 2004, involves commission of an offence punishable under the Indian Penal Code, 1860 and to incorporate the process to be opted by an authorized officer for prosecution after investigation of an offence.

Amendment of Section 93:

The amendment in section 93 is to disallow compounding of offences to a habitual offender. Before amendment the defaulters could reach to Commissioner for compounding of offences again and again thereby avoiding prosecution of case.

Concluding Remarks:

The intent of Govt. is clear towards effective implementation of law by making it more stringent in case of penalties, prosecution and compounding. The advance tax for importers has been proposed which may substantially increase revenue for exchequer.

(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.

More Under Goods and Services Tax


  1. ARUN MITTAL says:

    But sir Importers are already paying VAT equivalent by way of SAD or ACD (which they get refund after furnishing proof of selling the same and having paid due VAT on those sales) !

    This will amount to double taxation, I believe.

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

October 2020