In Our last article we discussed highlights of Delhi Tax Compliance Achievement Scheme, 2013. In this article we are discussing some of the frequently asked questions on Delhi Tax Compliance Achievement Scheme, 2013.
FREQUENTLY ASKED QUESTIONS
Enforcement Survey
Q1. What is the procedure for evaluating the amount to be paid wherein enforcement survey/seizure of goods/ papers have been made or where the notice of audit has been issued?
If the dealer wants the estimated tax dues to be evaluated he may contact the help desk under supervision of Sh. C. Arvind, Additional Commissioner (T & T). Tel. No. 011-23705434; email – actt.amnesty.scheme@gmail.com
Q2 In case of survey cases where default assessment is pending, and where advance cheque has been collected by the enforcement team at the time of survey and encashed; can such advance payment be adjusted from the amount of tax deficiency stated by the team in its report? If yes, where the amount of advance tax is more than the tax dues, can that excess payment be carry forward by the declarant and adjusted from his future tax liability?
Yes, the advance tax collection can be adjusted by the declarant from his tax dues. Any excess payment can also be adjusted from his future VAT liability. However, he shall file the relevant details along with the DSC-1.
Also, what about the case where the dealer admits his tax liability and deposits the same within 3 days of the survey?
It would not be applicable since section 87(6) was inserted w.e.f. 1.4.2013; and the amnesty scheme covers the tax dues upto 31.3.2013.
Assessment/Audit/Special Audit
Q3. Since dealers can declare under the VVAS upto 31st January, 2014, whether assessment / audit / special audit / objection/ appeal / recovery proceedings of the Department will continue during the period of VVAS i.e. upto 31.01.2014 ?
Yes. There is no guarantee that the dealer will opt for VVAS and hence, the Department will continue with assessment / audit / special audit / objection/ appeal / recovery proceedings in the normal course and if the proceedings all completed then the dealer will need to pay the assessed tax with interest. Hence, it is in the interest of the dealer to declare and avail the benefit under VVAS at the earliest and in any case on or before 31.01.2014.
Q4. If the notice of assessment has been issued and the dealer is not disputing the tax and interest and has already paid the same what would be the procedure for claiming benefit of waiver of penalty under Amnesty Scheme?
The dealer can file DSC-1, along with proof of payment of tax and interest, to avail the benefit.
Q5. Can VVAS be applied for part of the assessment order/notice of assessment?
No. Under VVAS, the dealer would be required to pay the entire assessed tax and interest.
Q6. There are instances of more than one rate of tax for the same/similar goods depending on sale value or other differentiation. Can we get an illustrative list of goods with more than one rate of tax?
To ascertain the rate of tax on goods, the dealers are advised to refer section 4, section 6 and the Schedules appended to the Delhi Value Added Tax Act, 2004. An illustrative list of goods with more than one rate of tax is given below:-
| Sl. No. |
Commodity |
Rate of Tax |
Rate of Tax |
| 1. | Watches | Costing upto Rs. 5000 – 12.5% | Costing above Rs. 5000 – 20% |
| 2. | Printers | Normal Printers – 5% | Multi-functional printers – 12.5% |
| 3. | Garments | Costing upto Rs. 5000 – 5% | Costing above Rs. 5000 – 12.5% |
| 4. | Foot wears | Costing upto Rs. 500 – Exempt | Costing above Rs. 500 – 12.5% |
| 5. | Hardware and Sanitary Goods |
Hardware – 5% | Sanitary fittings and goods – 12.5% |
| 6. | Paper & Board | Normal paper & board – 5% | Coated paper and board – 12.5% |
| 7. | Mobile phones | Costing upto Rs. 10000 – 5% | Costing above Rs. 10000 – 12.5% |
| 8. | Electric cables | Cables having cross section area of the core from 0.5 to 6.0 sq. millimeter – 12.5% |
Industrial cables i.e. Cables having cross section area of the core above 6.0 sq. millimeter – 5% |
Q7. Where an Audit notice has been issued to the dealers; and the dealer wants to pay tax dues under VVAS, what would be the procedure for dropping/withdrawal of such notice?
The dealer could estimate the deficit tax, which has led to issuance of the audit notice, and pay the same along with DSC 1. Alternatively, the dealer may contact help desk to ascertain his estimated tax dues on payment of which his audit is unlikely to be pursued, unless some other aspect which is substantially adverse comes to notice, and pay the same with DSC 1.
Q 8. Can a dealer pay a single/ consolidated amount against his estimated tax dues in context of his tax dues for the multi-year audit or multi-year special audit ordered against it; or otherwise?
Yes, the declarant can pay tax dues through single challan and file one DSC-1 for the consolidated amount. However, the declarant shall furnish tax period wise details of tax dues along with DSC-1.
Returns
Q9. If a dealer has defaulted in filing return and has paid tax late what will be the procedure for applying under Amnesty Scheme and return filing?The dealer should file online return as per the normal procedure and apply in DSC1 separately for availing waiver of interest and penalty relating to the tax deficiency only. The dealer will, however, have to pay tax first, along with proof of the same, to claim the benefit under Amnesty scheme.
Objection/Appeal
Q.10. Where objection or Appeal has been partly allowed and case has been remanded, what would be the procedure for VVAS?
The dealer will have to get the remanded case assessed and then avail benefit under the Scheme on the basis of revised order. He may contact the concerned Zonal Additional/ Joint Commissioner to get the remanded order passed at the earliest.
Q11. Appeal filed before the High Court and Supreme Court cannot be withdrawn unless DSC-3 is issued. And it would not be possible to withdraw appeal before acceptance of VVAS. Can revised guidelines be issued in this regard?
After the declarant dealer has paid the full tax and interest, as applicable, under the VVAS, the Department will issue a letter of intent of issuing DSC-3. After dealer files copy of application of withdrawal of Court case, the Department will issue DSC-3. However, this DSC-3 will get confirmed only when the case is finally withdrawn.
Q12. In case of remand assessment, the interest is levied upto the date of remand order. Suppose the total demand of a dealer is ₹2 lacs; and the OHA has granted partial relief of ₹10,000/ and remitted the matter to the AC(VAT) for the remaining part of the assessment order. However, in remand assessment, to claim the benefit of this ₹10,000/-; the dealer might have to pay additional interest of ₹30,000/- (i.e. on remaining tax: from the date of original order till the date of remand order). In such a case, can the declarant pay tax dues as per the original assessment order, without getting the remand assessment done as directed by the OHA?
Once the remand assessment order is passed, the original order gets merged in the remanded order and loses its identity; therefore, declarant shall pay tax dues stated in the remand assessment order.
However, where the objection is partly allowed but remand assessment has not been framed till the date of declaration, the declarant can pay tax dues as per the original assessment order, provided the declarant pays full tax and interest as per earlier assessment order and not a part of it.
Penalty
Q13. Where tax and interest have been admitted, and paid; however, penalty is under challenge: Can VVAS be applied for amount of penalty in relation to such tax? If yes, how DSC-1 to be filed since nothing would be payable?
Yes, the dealer can file DSC-1, along with proof of payment of tax and interest, to avail the benefit.
Q14. Where amount of tax and interest is Rs. 10,000/- and penalty is Rs. 5,000/-. The dealer has already paid Rs.12,000/-. How would DSC-1 be filled since there is excess payment of Rs.2,000/-?
The penalty paid/ partly paid prior to the date of notification of the Scheme will not be allowed to be adjusted. The amnesty benefit would be available only for the balance of penalty.
Q15. Whether the amount paid towards the stay of demand of penalty can be adjusted towards tax dues? For example, assessment is made for an amount of tax and interest for ₹10,000/-; and for penalty – ₹5,000/-. The dealer deposited stay amount of ₹2,000/- towards tax; and ₹1,000/- towards penalty. How much amount would be deposited by the declarant under VVAS?
The declarant shall pay ₹7,000/- [10,000/ (-) 2,000/ (-) 1,000/] under VVAS; and get immunity from payment of penalty of ₹5,000/-.
Registration
Q.16 a) Whether a dealer, whose registration has been cancelled due to any reasons, has neither deposited tax nor furnished return after cancellation, can opt for the amnesty scheme simply by paying the tax dues under the scheme?
b) Will there be any difference if the objection/appeal against the cancellation order is pending?
c) If yes, what will be the procedure?
No. There is no provision of summary disposal of restoration application underamnesty scheme. The restoration process has to be through objection only. Moreover, suo-motto cancellation of registration is done in rare cases due to serious violation. Thus, summarily restoring all such cases in amnesty scheme without going into merits may not be possible. However, the dealer can avail of the amnesty scheme as unregistered dealer during the period of cancellation. The dealer is not expected to file the returns for the unregistered period as far as Amnesty scheme is concerned till he gets a new registration or his earlier registration is restored.
Q17. Can an unregistered dealer/contractee, who has discontinued his business before 31st March 2013, pay tax dues under VVAS without getting registration under the Act (to avoid registration, and then its cancellation)?
Yes, he can pay tax dues under this Scheme. However, where the dealer claims that he is not liable to pay tax under the Act from 1st April 2013 upto the date of declaration, he shall file an affidavit in this regard along with DSC-1. In the affidavit the dealer/ contractee shall indicate his date of liability (date on which his business activities started) and the date on which he ceased to be a dealer/contractee.
Preparation of DSC-1
Q18. Whether period of turnover, to which tax dues relates, would be disclosed in DSC-1 by the declarant?
Yes; so that the dealer can be given the benefit of declaration for that period.
Q19. The Builder, if opts to pay tax @3%, would claim deduction for land from GTO. Will he be required to furnish year wise computation of turnover along with DSC1?
Yes.
Q. 20. A dealer pays tax under VVAS for the period from 1.4.2009. Would he be summoned for non-declaration of tax dues for the period before 1.4.2009?DSC-1 will discharge the dealer of his liabilities for the period/year for which it is filed. As per proviso to Section 34 (1) (b) of the DVAT Act, 2004, the Commissioner can examine non-declaration of tax dues upto six years.
Works Contract/Builder
Q21. A contractee opts for VVAS and pays tax of 3% after obtaining registration. He is not required to file TDS return for the period upto 31.03.2013. His immediate contractor has also not filed his return.
– Since the language of explanation to clause 3(5) is not clear, whether contractor would get immunity from payment of tax, apart from interest and penalty?
– What would be the procedure to disclose the name of the contractor by the contractee, so that contractor could get immunity from tax, etc.?
Yes. If one of the parties either contractee or contractor avails the Scheme and pays 3% tax, then both the parties will get immunity from interest and penalty for the particular contract/ part of contract. The contractee has to file the return as per the provisions of the DVAT Act & Rules wherein the name of contractor has to be filled up.
Q22. It has been stated in the VVAS that double taxation has been avoided in works contract transaction. Where the contractee has failed to deduct TDS, but his contractor has paid due taxes and filed returns as prescribed, will the contractee get immunity under this scheme? If yes, what will be the procedure?
Yes, the contractee can get immunity under the VVAS. For this purpose, he shall file DSC-1 along with copy of all returns filed by his contractor along with Form 2B of the contractor. The contractee shall get immunity only of that turnover amount, which is stated by the contractor in Form 2B of his DVAT Return against that contractee. If the contractee does not have TAN under the Act, he shall first obtain TAN under the Act.
Q23. Please explain calculation of tax in case of collaboration agreement.
LO = LAND OWNER, BD = BUILDER DEVELOPER, IP = INTENDING PURCHASER LO entered into a Collaboration Agreement with the BD, for a property. The BD constructs four floors – two would belong to the LO and two to the BD.
1) BD would also pay a sum of ₹150 to the LO (area of plot being 200 sq. yds, the size of original plot).
