Breather to Traders as Delhi VAT act gets ammended
Sources say that the VAT target for the current fiscal year is Rs 18,200 crore while collections have been around Rs 16,500 crore.
By TNN | Updated:
NEW DELHI: Delhi cabinet on Friday made amendments to the Delhi Value Added Tax Act of 2006. The amendments will make it possible for traders to avail credits from input tax even after the end of a financial year. Earlier, it was necessary to claim refund on or before March 31.
The cabinet has also decided to bring vote on account during an assembly session on March 24 and 25 to determine the government's budget for three months till a full budget is presented either by May end or the beginning of June.
"The change in the VAT Act was a long standing demand by traders. We also felt that it is a valid claim and after studying its implications, decided to make the necessary changes. Before this, traders were forced to claim refund, if any, before the end of each financial year on the input tax paid by them. This was a cumbersome process and traders were apprehensive that the refund amount would lapse in case they failed to claim the reimbursement. This amendment will allow them to carry forward their credit to successive financial years," said deputy chief minister Manish Sisodia.
Sources say that the VAT target for the current fiscal year is Rs 18,200 crore while collections have been around Rs 16,500 crore.
"When compared to the same period last year, VAT collections this February has gone down by 5.5%. Major reasons for this were some provisions of the VAT law which were leading to unnecessary harassment of traders," sources said.
Input tax credit was one such issue. Sources explained: "Usually before the end of a financial year, traders tend to stock up products as part of bulk purchases but are often unable to make corresponding sales in the same duration. The amendments made to the VAT law under Section 11 in 2013 meant that irrespective of sales, a trader will have to pay tax on all the purchases and then claim a refund later. This process was extremely tedious. Consequently, many traders chose to relocate to neighbouring states for sales and purchases over the past two years. The amendment will now enable them to stock up in one year and carry forward the stock to the next financial year without getting stuck in cumbersome procedures of seeking tax refund."
The cabinet has also decided to bring vote on account during an assembly session on March 24 and 25 to determine the government's budget for three months till a full budget is presented either by May end or the beginning of June.
"The change in the VAT Act was a long standing demand by traders. We also felt that it is a valid claim and after studying its implications, decided to make the necessary changes. Before this, traders were forced to claim refund, if any, before the end of each financial year on the input tax paid by them. This was a cumbersome process and traders were apprehensive that the refund amount would lapse in case they failed to claim the reimbursement. This amendment will allow them to carry forward their credit to successive financial years," said deputy chief minister Manish Sisodia.
Sources say that the VAT target for the current fiscal year is Rs 18,200 crore while collections have been around Rs 16,500 crore.
"When compared to the same period last year, VAT collections this February has gone down by 5.5%. Major reasons for this were some provisions of the VAT law which were leading to unnecessary harassment of traders," sources said.
Input tax credit was one such issue. Sources explained: "Usually before the end of a financial year, traders tend to stock up products as part of bulk purchases but are often unable to make corresponding sales in the same duration. The amendments made to the VAT law under Section 11 in 2013 meant that irrespective of sales, a trader will have to pay tax on all the purchases and then claim a refund later. This process was extremely tedious. Consequently, many traders chose to relocate to neighbouring states for sales and purchases over the past two years. The amendment will now enable them to stock up in one year and carry forward the stock to the next financial year without getting stuck in cumbersome procedures of seeking tax refund."
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