Section 16 - Composition scheme for specified dealers Rule 5 - Delhi Value Added Tax Act, 2004

16. Composition scheme for specified dealers Rule 5- (1) Notwithstanding anything contained to the 1 [ contrary ] in this Act, every dealer whose - (a) turnover in the year preceding the commencement of this Act; or (b) turnover in the current year, 2 [ *** ] does not exceed 3 [ fifty lakh ] rupees or such other amount as may be specified by the Government by notification in the official Gazette, shall have an option to pay tax under this section: Provided that this 10 [sub-section] shall not apply to dealers procuring goods from any place outside Delhi or selling or supplying goods to any place outside Delhi at any time during the year in which he opts to pay tax under this 10 [sub-section] or if he is registered 1 [ in Delhi ] under the Central Sales Tax Act, 1956 (74 of 1956). 11 [ Provided further that in case the Government has notified a composition scheme for a class of dealers under sub-section (12) of this Section, such dealers shall not have an option to pay tax under this sub-section.] (2) At the time of making application for registration under section 19 of this Act, the dealer covered under sub-section (1) shall be required to specify if he intends to pay tax under this section: Provided that once the dealer chooses to pay tax under this section, the option may be reversed only after the end of the year for which the option is made, by application to the Commissioner within such time and in such manner as may be prescribed: Provided further that where a dealer chooses to reverse his option to pay tax under this section, he shall be eligible to claim credit of the tax paid under this Act on the trading stock, raw material and packaging material held by him in Delhi on the date when such reversal takes effect subject to the conditions contained in section 20 of this Act in so far as they are applicable. (3) In case a person who 4 [ elects ] to pay tax under this section - (a) who is registered under the Delhi Sales Tax Act, 1975 (43 of 1975) or the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) 1 [ or the Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002), ] at the time of the commencement of this Act; and (b) whose turnover in the year preceding the commencement of this Act 2 [ *** ] does not exceed 3 [ fifty lakh ] rupees or such other amount as may be specified by the Government by notification in the official Gazette, he shall be required to specify the 5 [ election ] to pay tax under this section within such time and in such manner as may be prescribed. (4) Where a dealer 6 [ elects ] to pay tax under this section, the dealer's net tax shall be the amount determined at the rate of one paisa in the rupee of the turnover of the dealer. (5) A dealer who elects to pay tax under this section shall - 7 [ 8 (a) not purchase goods from a person who is not registered under this Act; Provided that this restriction shall not apply for the purchase of goods from an unregistered dealer dealing exclusively in goods mentioned in the First Schedule ] (b) not compute his net tax under section 11 of this Act; (c) not be allowed to claim credit under section 9, section 14 and section 15 of this Act; (d) not be entitled to issue tax invoice; (e) not be allowed to collect any amount by way of tax under this Act; and (f) ] continue to retain tax invoices and retail invoices for all of his purchases as required under section 48 of this Act. (6) In case a person - (a) who is registered under the Delhi Sales Tax Act, 1975 (43 of 1975) or the Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999) 1 [ or the Delhi Sales Tax on Right to Use Goods Act, 2002 (Delhi Act 13 of 2002), ] at the time of the commencement of this Act; (b) whose turnover in the year preceding the commencement of this Act 2 [ *** ] does not exceed 3 [ fifty lakh ] rupees or such other amount as may be specified by the Government by notification in the official Gazette; and (c) who has opted to pay tax under this section in terms of sub-section (3) of this section; he shall be required to pay tax on the trading stock, raw material, packaging material (in this sub-section referred to as "opening stock") and finished goods held on the date of the commencement of this Act at the rates specified in section 4 of this Act on the fair market value of such opening stock and finished goods where such opening stock and finished goods have not borne tax under the Delhi Sales Tax Act, 1975 (43 of 1975). (7) The tax due under sub-section (6) of this section shall be paid at any time before the person specifies his intention to pay tax under this section. (8) The proof of payment of tax referred to in sub-section (6) of this section along with a statement of opening stock and finished goods in such form as may be prescribed shall be furnished to the Commissioner at the time the person specifies his intention to pay tax under this section. (9) Subject to the other provisions of this section, where a registered dealer pays tax at the rates specified in section 4 of this Act, he may choose to pay tax under this section only from the beginning of the following year: Provided that such registered dealer shall be required to pay tax at the rates specified in section 4 of this Act on the trading stock, raw material, packaging material and finished goods held by him on the first day of the said following year. 1 [ (10) If the turnover of a dealer who elects to pay tax under this section exceeds fifty lakh rupees or such other amount as may be specified by the Government by notification in the official Gazette, he shall be liable to pay tax under section 3 of this Act on and from the day his taxable turnover exceeds fifty lakh rupees or such other amount as may be specified by the Government by notification in the official Gazette and shall be entitled to claim credit of the input tax paid under this Act on trading stock, raw material and packaging material held by him in Delhi on such day : Provided that such dealer has intimated the Commissioner within seven days of his becoming liable to pay tax under section 3 of this Act in the prescribed form and has furnished such other information to the Commissioner as may be prescribed. (11) The Commissioner may notify a dealer or a class of dealers who shall not be entitled to opt for payment of tax under this section. ] 9 [ (12) Notwithstanding anything to the contrary contained in this Act, the Government may. - (a) by notification in the Official Gazette, notify schemes of composition, subject to such conditions and restrictions as may be specified therein, of tax payable by a class of dealers or classes of dealers and different types of schemes may be notified for different classes of dealers (b) specify, in any scheme of composition of tax payable by the class of dealers or classes of dealers, different rates of taxes for different class or classes of dealers but, in such scheme, the net tax liability of the dealer opting to pay tax thereunder shall not exceed eight paise in the rupee of the turnover of the dealer. ] ---------------------------------- Notes:- 1. Inserted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. 2. Omitted vide DVAT (Second Amendment) Act, 2005; Notification No.F.14(29)/LA/2005/333, dated 16/11/05 , w.e.f. 16.11.2005. before it was read as:- exceed the taxable quantum under this Act, but . 3. Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. before it was read as:- twenty five lakh 4. Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. before it was read as:- intends 5. Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. before it was read as:- intention 6. Substituted vide DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. before it was read as:- chooses 7. Substituted vide DVAT (Second Amendment) Act, 2005; Notification No.F.14(29)/LA/2005/333, dated 16/11/05 , w.e.f. 16.11.2005. before it was read as:- (a) not purchase goods from a person who is not registered under this Act; 8. Re-lettered from (a) to (b) DVAT (Amendment) Act, 2005; No. F.14(6)/LA-2005/112, dated 28.03.2005 w.e.f. 01.04.2005. 9. Inserted vide DVAT (Second Amendment) Act, 2005; Notification No.F.14(29)/LA/2005/333, dated 16/11/05 , w.e.f. 16.11.2005. 10. Substituted vide DVAT (AMENDMENT) ACT, 2013 (DELHI ACT 01 OF 2013) w.e.f. April 1, 2013 before it was read as 'section'. 11. Inserted vide DVAT (AMENDMENT) ACT, 2013 (DELHI ACT 01 OF 2013) w.e.f. April 1, 2013.