Delhi VAT Circular No. 9 Central Sales Tax Act 1956 – Framing of assessments

VAT, Indirect Tax, VAT – Delhi

Delhi VAT Circular No. 9 dated 9 June 2011 [No. F.6(85)-Policy-VAT-2011-147-154]

09 Jun 2011

Central Sales Tax Act 1956 – Framing of assessments

Section 9(2) of CST Act, 1956 empowers the assessing authorities to frame assessments in accordance with the provisions contained in general sales tax law of the appropriate state which is Delhi Value Added Tax act, 2004 in case of Delhi.

2. Circular for framing central assessments have been issued in the past also. Circular No. 13 of 2007-08 dt 30/01/08 and Circular No. 15 of 2006-07 dt. 30/03/07 may also be referred in this regard.

3. The time limit for furnishing statutory forms is three months after the end of each quarter to which the declarations or statutory forms relates. Second provision to Rule 12(1) of Central Sales Tax (Registration and Turnover) Rules, 1957 provides for covering all transaction of sale, which take place in a quarter of financial year between same two dealers. The prescribed time of three months is sometimes extended to a quarter or more than quarter at times centrally by Commissioner, VAT in exercise of the powers conferred under relevant provisions of Central Sales Tax (R and T) Rules, 1957 and DVAT Rules, 2005.

4. It has also come to notice that some assessing authorities are issuing manual assessment order in contravention of instructions contained in Circular No.15 of 2006/07.



5. In order to liquidate all pending assessments of deficient central statutory forms cases, it has been decided to adher to following time schedule:

S. No. Assessment Year Quarter Date by which assessments to be completed

1 2007-08 Qtr. II Qtr. III and Qtr. IV 30-06-2011



2 2008-09 All Quarters 31-12-2011


3 2009-10 All Quarters 31-03-2012
4 2010-11 All Quarters 30-06-2012


6. If time permits, assessing authorities may take up the cases for assessment even before the dates indicated in Col. 4 above. However, no case pertaining to any year for deficiency of statutory forms should remain un-assessed beyond the dates indicated above, it shall be personal responsibility of each Assessing Authority in respect of their assigned work.

7. While taking up a case for assessment due to deficiency of statutory forms, other aspects like scrutiny of balance sheet (for dealer having GTO > Rs.40.00 lakh), timely filing of returns, timely payment of due tax under both the Acts, tax credit availed on purchased locally, adjustment of tax credit, reversal of tax credit on transfer of goods after local purchase, tally of return version with balance sheet etc., may also be looked into.

8. For dealers who are not engaged in central sale in particular period/year, no reconciliation is required.

9. This issues with the approval of Commissioner, VAT.


G.C. Tolani

VATO (Policy)


Delhi VAT Budget 2010 Proposals

Ca. Vinay Bhushan

VAT rates of various commodities in Delhi, which are less than the rates suggested by the Empowered Committee of State Finance Ministers, are termed as deviations. A number of deviations have been done in the past. On account of these deviations Delhi Government have incurred losses in revenue collection as well as reduced compensation from the Central government. It has been proposed to remove such deviations on items / commodities and levy VAT as follows:-

From exempted 0% to 5%

1. Compressed natural gas (CNG) for use in transport sector

2. Rassi, Ban & Newar

3. Bio inputs like Fertilizers and Micro-nutrients and plant growth promotors

4. Kerosene stoves, lanterns and petromax and their spares

5. Embroidery and zari items

From exempted (0%) to 12.5%.

1. Motion Picture distribution when treated as right to use goods

2. Plastic scrap/ glass scrap.

From 5% to 12.5%

1. All other scraps

2. Dry fruits and kesar and magaj of all kind

3. Desi Ghee

4. Household plastic items

5. Plastic and tin containers including barrels

6. Wood and timber and plywood and laminated boards

7. Fitting for doors and windows and furniture

8. Wire mesh and metal mesh

9. Paintbrushes

10. Tractor tyres and tubes

11. Cocoa and coffee including coffee beans

12. Invertors

13. All Utensils and cutlery items (including Pressure cookers / Pans) except those made of precious metals

14. Fertilizers, pesticides, weedicides, insecticides, herbicides, rodentecides and plant growth regulators (other than those covered in First Schedule)

15. Glucose D

16. Locks

17. Weights and Measures

18. Fibre Board and particle board

19. Tea

Diesel From 12.5% to 20%

Concessions continue on following items :

1. Kirana Items except dry fruits, kesar and magaj of all kind

2. Foodgrains, Atta, Maida, Suji

3. Amla, Harad, Bahera, Shikakai, Supari, Ratanjot, Khusak, Pudina

4. Hawan Samagri and Incense Sticks

5. Unbranded goli and toffee

6. Midday Meal supplied by agencies approved by the Delhi Govt. and Local Bodies to schools

7. Jute and all kind of jute products including natural dyes and bleached, diversified, plain and laminated jute products

8. School Bags with MRP upto Rs.300/-

9. Tricycles meant for use by persons with disability

10. Blood filters

11. Compact Fluorescent Lamp and electronic Choke

12. Natural Gas and R-LNG (Re-gassified Liquid Natural Gas) sold to power generation companies owned by Government of NCT of Delhi for generation of power meant for sale in Delhi)

13. Piped Natural Gas

Luxury Items :- It is proposed to increase VAT on writing instruments costing above Rs.1,000/- from present 5% to 12.5%, watches above Rs.5,000/- from 12.5% to 20%, Mobile Phones and all mobile accessories above Rs.10,000/- from 5% to 12.5%, readymade garments above Rs.5,000/- from 5% to 12.5%. This measure is likely to generate approximately Rs.100 crores as additional revenue.

It is proposed to enhance VAT on aerated drinks from 12.5% to 20% as a measure to generate additional revenue to the tune of Rs.10 crores.

To give relief to Thalesemia patients we have already exempted “Desferrioxamine” “Deferiprone” and Blood Filters (Lucocites Filter) used for treatment of Thalassemix. I also propose to exempt new Oral Iron Chelator Defarasirox by including it in the First Schedule of the Act.

Government of Delhi has constituted the Delhi Dispute Resolution Society with the objective to establish institutionalized mechanism of alternate dispute resolution. I propose to frame a mechanism of mediation to resolve disputes of Sales Tax / Value Added Tax cases by appropriately amending the DVAT Act, 2004.

Subsidy on Domestic LPG:-

Due to subsidy of Rs.40/- on domestic LPG cylinder (14.2 Kg.), Government of Delhi is bearing a burden of approximately Rs.160/- to Rs.170 crores per annum. It is proposed to withdraw this subsidy.

Stamp & Registration

The registration fee charged on various documents under Indian Registration Act, as applicable to Delhi, is meager. The maximum registration fees is Rs.100/- in NCT of Delhi. It is proposed to bring it at more realistic level by raising maximum registration fee to Rs.500/- and registration fees in other slabs will also be enhanced proportionately. It is likely to generate additional revenue of Rs.6 crores.

(Please note that these are only proposals and will be effected only after passing of the budget and notification)

VAT Rate 4 % to 5% in Delhi w.e.f. 13-01-2010


(As passed by the Legislative Assembly of the National Capital Territory of Delhi on the 16th December,2009)

(Date of Approval -1st January, 2010)

Published in Notification Dated 6-1-2010 [F.14(16)/LA-2009/LJ/10/LC LAW/1]

An Act 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.—(l) 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.- Inthe Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005)(hereinafter referred to as “the principal Act”), in Section 4, in 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.””

By Order and in the Name of the Lt. Governor of the NationalCapitalTerritory of Delhi,


Please Find enclosed the notification for effective date of change of notification.


Should i pay extra tax while purchasing goods on bills in Inida?

After implementation of  VAT in india retailers are making extra money for selling goods on bills.
Suppose i bought a branded ceiling fan in Delhi and retailer have quoted a price Rs.1200 nothing else but as soon i asked for a bill he told me to pay  12.5% VAT extra on Rs.1200.
In VAT system retailer purchase goods after paying tax to the manufacturer it means whatever tax he has paid to the manufacturer is already included in his cost and that should not affect by taking bill or not.
Only VAT on retailer’s markup is to be added if i take bill from him not full tax on whole amount. In this way retailer are making fool to the consumers. Further what they do, they sell the bills to a seprate person and earn extra money by selling bills without goods.
By this excercise they are evading income tax as well as VAT and cosumers are suffering. So please always negotiate for including VAT pricae and ask for bill.