THE DELHI VALUE ADDED TAX (AMENDMENT) BILL, 2009 - No. 21(10)/2009/LAS-IV/Leg./10322 - Delhi Value Added Tax

Bill No. 10 of 2009 THE DELHI VALUE ADDED TAX (AMENDMENT) BILL, 2009 (As introduced in the Legislative Assembly of National Capital Territory of Delhi on 14-12-2009 ) Bill No. 10 of 2009 THE DELHI VALUE ADDED TAX (AMENDMENT) BILL, 2009 A BILL No. 21(10)/2009/LAS-IV/Leg./10322. - The following is published for general information:- to further amend the Delhi Value Added Tax Act, 2004 . Be it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Sixtieth Year of the Republic of India as follows:- 1. Short title, extent and commencement. - This Act may be called the Delhi Value Added Tax (Amendment) Act, 2009. (2) It extends to the whole of the National Capital Territory of Delhi. (3) It shall come into force on such date as the Government may, by notification in the Official Gazette appoint. 2. Amendment of section 4. - In the principal Act , in section 4, sub-section (1), for clause (b) , the following clause shall be substituted, namely:- "(b) in respect of goods specified in the Third Schedule , at the rate of five paise in the rupee. Provided that tax shall be paid at the rate of four paise in the rupee of the taxable turnover of the dealer pertaining to declared goods, as defined from time to time in the ' Central Sales Tax Act, 1956 (74 of 1956) ;". 3. Amendment of section 9. - In the principal Act , in section 9 ,- (a) in sub-section (1) , for the words "where the purchase arises", the words "to the extent of proportion of the goods which have been put to sale" shall be substituted; (b) in sub-section (2), after clause (f) , the following clause shall be inserted namely:- "(g) to the dealers or class of dealers unless the tax paid by the purchasing dealer has actually been deposited by the selling dealer with the Government or has been lawfully adjusted against output tax liability and correctly reflected in the return filed for the respective tax period." 4. Amendment of section 10. - In the principal Act , in section 10, after sub-section (4) , the following sub-section shall be inserted, namely:- "(5) Where the goods which have been purchased by a dealer are sold at a price lower than the price at which it was purchased by the dealer, the tax credit on such purchases shall be reduced proportionately in the tax period during which the goods are sold. Explanation- The tax credit claimed on a particular purchase shall not exceed the amount of tax payable on its sale." 5. Amendment of section 74. - In the principal Act , in Section 74, in sub-section (10) , for the word "five", the word "six" shall be substituted. 6. Amendment of section 74A. - In the principal Act , in Section 74A after sub-section (4) , the following sub-section shall be inserted, namely:- "(5) Notwithstanding anything contained in any judgment, decree or order of any court, the provisions of this section shall be deemed to have come into effect with effect from the 1st April 2005." 7. Substitution of new section for section 103. - In the principal Act , for Section 103 , the following section shall be substituted. namely:- "103. Power to amend Schedules-(1) If the Government is of opinion that it is expedient in the interest of general public so to do, it may, by notification in the official Gazette, add to, or omit from, or otherwise amend, the First , the Second , the Third , the Fourth , the Fifth , the Sixth or the Seventh Schedules , either retrospectively or prospectively, and thereupon the said Schedules shall be deemed to have been amended accordingly: Provided that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of a dealer. (2) The commissioner may, on the recommendation of the Ministry of External Affairs, Government of India, if he is of opinion that it is expedient in the interest of general public so to do, by a notification in the official Gazette, add to, or omit from, or otherwise amend, the Sixth Schedule." STATEMENT OF OBJECTS AND REASONS The Delhi Value Added Tax Act, 2004 is proposed to be amended to incorporate certain provisions aiming at addressing on an urgent basis some fresh anomalies and discrepancies which have come to notice in the course of the implementation of the Act. It is expedient to remove them in order to prevent erosion of faith of the business community and the public in general. It has also been observed that certain provisions in the existing Act requires appropriate amendment for making tax administration more efficient and effective and also to plug the loop holes in the Act for better tax compliance. The Government of India has asked the State Government to raise Value Added Tax rate from 4% to 5% to partially compensate the loss incurred due to phasing out of Central Sales Tax. The Government of India has also intended to make calculation of compensation to he paid for the year 2009-10 on the basis of presumption that State has increased Value Added Tax rate from 4% to 5% w.e.f 1st April, 2009. In order to avoid loss on this account and also to generate additional resources, it is proposed to enhance Value Added Tax rate from 4% to 5% on goods specified in Third Schedule except declared goods under Central Sales Tax Act, 1956 . The proposed amendments will remove confusion and prevent any possible leakage of revenue and also will simplify the procedure for the dealers. The Bill seeks to achieve the aforesaid objectives. FINANCIAL MEMORANDUM The clause 2 of the proposed Amendment Bill, proposes to enhance tax rate from 4% to 5% on the goods specified in the Third Schedule except declared goods as defined in the Central Sales Tax Act, 1956 . This enhancement of tax rate is likely to generate additional resources to the tune of Rs. 500 crores. The Delhi Value Added Tax (Amendments) Bill, 2009 does not involve any additional financial implications since no outgo is anticipated from the Consolidation Fund of the National capital Territory of Delhi. MEMORANDUM REGARDING DELEGATED LEGISLATION Clause 7 of the Delhi Value Added Tax (Amendment) Bill, 2009 confers on the Commissioner of Value Added Tax the power to amend the Sixth Schedule of the Act on the recommendations of the Ministry of External Affairs, Government of India. The matters in respect of which amendment may be made are matters of administrative detail and procedure and, as such, the delegation of legislative power is of a normal character. SIDDHARATH RAO, Secy.