Merger of Two UTs; Dadra & Nagar Haveli and Daman & Diu

Merger Of The Two Union Territories (UTs) Dadra & Nagar Haveli And Daman & Diu

A big step forward to recognize vision of ‘minimum government, maximum governance’ was taken by the Union Cabinet, approving the amendments/extension/repeal in abundant Acts and Regulations pertaining to Goods and Services Tax (GST), Value Added Tax (VAT) and State Excise of the two Union Territories i.e. of Dadra & Nagar Haveli and Daman & Diu, designating the Daman as the headquarters of the Union Territory.

On 3^rd day of December, 2019 the Parliament passed the Dadra and Nagar Haveli and Daman and Diu Bill, 2019 for the merger of the two UTs and the appointed date of the said amendment was made effective from January 26, 2020.

The decision was taken with an aim to strengthen administrative efficiency and fast track the development for the citizens of the these two UTs, apart from savings to government exchequer and guaranteeing consistency, stability and consistency in day to day working of tax authorities.

Major impact on the existing laws by the decision of the Union Cabinet:

• The Central Goods and Service Tax Act, 2017 will be amended by the Central Goods and Service Tax (Amendments) Regulation, 2020,
• The Union Territory Goods and Service Tax Act, 2017 will be amended by the Union Territory Goods and Service Tax (Amendments) Regulation, 2020,
• The Dadra and Nagar Haveli Value Added Tax Regulation, 2005 will be amended by the Dadra and Nagar Haveli and Daman and Diu Value Added Tax (Amendments) Regulation, 2020.
• The Daman and Diu Value Added Tax Regulation, 2005 will be removed by the Daman and Diu Value Added Tax (Repeal) Regulation, 2020
• The Goa, Daman and Diu Excise Duty Act, 1964 amended by the Dadra and Nagar Haveli and Daman and Diu Excise Duty (Amendment) Regulation, 2020,
• The Dadra and Nagar Haveli Excise Duty Regulation, 2012 will be withdrawn by the Dadra and Nagar Haveli Excise Duty (Repeal) Regulation, 2020.

This will prompt common tax authorities, better conveyance of services to citizens by lessening the duplication of work and improving administrative proficiency, help in acquiring consistency in laws related with GST, VAT and state excise and furthermore, maintain a strategic distance from any lawful inconveniences in the levy and collection of tax and duty, including recovery of arrears, and consolidate the system of laws under the same.

Effect of the Merger:

Recently, the government decided to demerge the State of Jammu & Kashmir into two union territories from 31^st October, 2019 and the pros and cons of the same could be seen in the GST perspective. People had to face several complications in filing the returns, transferring the input tax credit, obtaining the new registrations, etc.

Clarification is needed as to how the things are going to work for the taxpayers in the new union territory of the Dadra & Nagar Haveli and Daman & Diu.