Composition of tax scheme - works contracts of the nature of civil construction - F. 3 (78)/Fin. (T&E)/2005-06/1508 kha - Delhi Value Added Tax

Composition of tax scheme - works contracts of the nature of civil construction (TO BE PUBLISHED IN PART IV OF THE DELHI GAZETTE-EXTRAORDINARY)GAOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELHI FINANCE (TAXES ESTABLISHMENT) DEPARTMENT DELHI SACHIVALAYA, I.P. ESTATE, NEW DELHI -110002 No. F. 3 (78)/Fin. (T E)/2005-06/1508 kha Dated: 17/03/06 NOTIFICATION No. F. 3 (78)/Fin. (T E)/2005-06 Whereas the Lt. Governor of the National Capital Territory of Delhi is of the opinion that it is expedient in the interest of general public so to do. Now, therefore, in exercise of the powers conferred by sub section (12) of section 16 of the Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005) , (hereinafter referred to as "the Act"), the Lt. Governor of the National Capital Territory of Delhi, subject to the conditions specified in column (3) against the classes of dealers specified in column (1) of the Table below, and other general conditions as prescribed in this notification and in supersession of earlier notification No. F. 3 (75)/Fin. (T E)/2005-06/893 kha dated 30 th November, 2005, hereby, provides the scheme of composition of tax payable by the said dealers as specified in column (2) of the said Table, namely:- TABLE Eligible class or classes of dealers Composition Amount Conditions (1) (2) (3) Every registered dealer engaged exclusively in works contracts of the nature of civil construction i.e. construction, electrification fiting out, improvement or repair of any building or complex, residential or commercial, bridge, flyover, dam or other similar structure or of any canal or road or such other similar activities as may be specified by the Commissioner from time to time (i) Two and half per cent of the entire turnover if the dealer opting to pay tax under this scheme makes all the purchases and the sales during the period for which composition is opted with in Delhi only. (ii) Three per cent of the entire turnover on account of works contracts executed in Delhi if the dealer is engaged in procuring goods from any place outside Delhi or in supplying goods to any place outside Delhi (1) The dealer shall - (a) not be eligible for making purchases, within Delhi, from a person who is not registered under the Act except in the case of goods specified in the First Schedule; (b) not be eligible to claim tax credit under section 9, 14 and 15 of the Act; (c) not calculate his net tax under section 11 of the Act; (d) no collect any amount by way of tax under the Act; (e) not be entitled to issue 'Tax invoices'; (f) continue to retain the original copies of all tax invoices and all retail invoices for all his purchases and copies of all retail invoices issued by him in respect of his sales as required under section 48 of the Act; (g) not make interstate purchases of the material on the strength of his registration certificate or declaration forms/certificated i.e. C Form, D Form, E-I Form, E-II Form and 'F' Form, for the purpose of utilizing it in the execution of works contracts; and (h) not import or procure goods from outside the country. (2) Where the dealer has made any payment to a sub contractor for the execution of works contract whether wholly or partly, and the sub-contractor has also opted to pay tax under this scheme, the dealer shall issue a certificate to such sub-contractor, in Form CC 01 appended to this notification and such sub contractor shall be eligible to reduce his turnover liable to be taxed under this scheme by the amount mentioned in the said certificate by enclosing it with his return. Such amount shall not constitute part of the field 3 of DVAT 17 for such sub-contractor. The contractor shall not deduct TDS from payments made to such sub-contractors in respect of the turnover covered by the certificate. (3) The dealer applying for a fresh registration can opt for this scheme by filing an application in Form WC 01 appended to this notification along with his registration application in Form DVAT 04. (4) A dealer who is paying tax under section 3 of the Act, can opt this scheme by filing an application in Form WC 01 appended to this notification within a period of thirty days from the first day of the year with effect from which composition is opted. Such a dealer shall pay tax, at the rates specified in section4 of the Act, on the opening stock of goods, held by him on the first day of the year with effect from which dealer opts to pay tax under this scheme, where such stock has been purchased with in Delhi or purchased on the strength the registration certificate or declaration Forms or certificated in the course of interstate trade and shall further reverse the input tax credit claimed on the capital goods during the three years immediately preceding the first day of the year with effect from which the dealer opts to pay tax under this scheme. The dealer shall furnish, along with his application for opting the scheme, the details of such opening stock and such capital goods, as mentioned above, in Form SS 01 appended to this notification and the proof of payment of tax in DVAT 20. (5) Once a dealer has opted to pay tax under this scheme, he shall, except under the circumstances described at SI. No. (7) below, not be eligible to withdraw his option before the end of the year for which opted to pay tax under this scheme. (6) A dealer ho, having opted to pay tax under this scheme for a particular year, does not intend to opt for payment of tax under this scheme for the following year, shall, subject to the conditions contained in section 20 of the Act in so far as they are applicable and further subject to furnishing of intimation regarding withdrawal from this scheme in form WC 02 within thirty days from the end of the year for which opted to pay tax under this scheme, be eligible to claim credit of tax paid on the opening stock held by him on the first day of said following year. (7) A dealer who has opted to pay tax under this scheme and has defaulted to furnish the returns for two consecutive tax periods by the prescribed due dates shall, with effect from the first day of the period immediately next to the latter tax period in respect of which the default has been committed - (i) cease to be liable to pay tax under this scheme (ii) be liable to pay tax under section 3 of the Act. Such a dealer shall also, subject to the conditions contained in section 20 of the Act in so far as they applicable and further subject to furnishing the intimation in Form WC 02 with in seven days after the end of due date prescribed for filing of return for the latter tax period in respect of which the default has been committed, be eligible to claim credit of the tax paid under this Act on the opening stock held by him in Delhi on the first day of the period immediately next to the latter tax period in respect of which the default has been committed. (8) The dealer dealing in works contracts other than private works contracts and who under this scheme is required to pay composition amount at the rate of three percent, shall make an application to the contractee authorizing him to deduct tax at the applicable rate of three percent instead of two per cent as provided in sub section (1) of section 36 (A). Note - Private contract for the purpose of this means a contract undertaken for any person other than - (1) the departments or their undertakings or their cooperative societies and (2) a company registered under the companies Act, 1956 (1 of 1956). General Conditions: (1) All the provisions of the Act and the rules made thereunder which are not contrary to this scheme shall apply to every dealer opting to pay tax under the scheme. (2) The tax period for the dealers opting to pay tax under this scheme shall be quarter unless otherwise prescribed by the Commissioner for a dealer or class of dealers. (3) In case a dealer has opted for this scheme but has failed to comply with the conditions specified therein or who, at any later stage, is found not eligible for having opted the scheme, all the provisions of the Act including the liability to pay tax under section 3, along with interest due for delay, if any, shall apply mutatis mutandi as if the dealer has never opted for the composition scheme and the amount deposited by such dealer as the composition amount, if any, shall stand forfeited. This notification shall come into force with effect from 1 st April, 2006. By order and in the name of The Lt. Governor of the National Capital Territory of Delhi, (Daljit Singh) DY. SECRETARY, FINANCE (T E)