DVAT LATEST AMENDMENTS - Lunawat &...

CA Rajesh Saluja Lunawat & Co.

DVAT LATEST AMENDMENTS

SNSC 13/06/2014


Latest Circulars

• Circular Dt. 02/06/2014 – Summer break from

02/06/2014 to 30/06/2014.

• During this period the AOs will not pass any Ex-parte

orders for non-appearance of Counsels.

• If a counsel upon an earlier fixation of case decides to

attend, he may do so.

• This exemption will not apply to:

•Remand Assessment cases

•Registration cases

•Any other case which is getting time barred

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Latest Circulars

• No.F(420)/VAT/Policy/2011/PF/02-08 Dt.

15/04/2014

• Although Notification No.F.3(27)Fin.(Rev-I)2013-

14/DSVI/292 was applicable w.e.f 05/03/2014, but

department allowed the return of 4th Qtr. To be filed in

old format.

• For Quarter ending June’14, new Format of Form I, is

available, wherein you are not required to file R10 and

R11 details.

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Latest Circulars

• Now Reconciliation return in Form 9 is to be filed online,

within six months from the end of a Financial Year.

• A dealer can also file return for one or more quarters

during the financial year, subject to the limit mentioned

above

• This return can be revised before the end of the financial

year next to which it relates.

• Commissioner has the power to further extend the

revision period by 3 months.

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Interesting Case Law

• M/s KONE Elevators India Pvt. Ltd. Vs. State of

Tamil Nadu

SC explains distinction between “Contract for sale

of goods” and “Works contract”

• Issue:

Whether supply, erection, installation and

commissioning of lift at customer’s premises

constitute “Contract for sale of goods” or “Works

contract”?

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• Hon’ble Sales Tax Appellate Tribunal, Andhra

Pradesh opined that the nature of work is a

“Works contract”, for the erection and

commissioning of lift cannot be treated as “Sale”

• On a revision being filed, the Hon’ble High

Court of Andhra Pradesh (“the Hon’ble HC”)

affirmed the view of the Tribunal

• the State of Andhra Pradesh filed a SLP with

Hon’ble Supreme Court of India 1-5



• By judgment dated February 17, 2005 in State of

A.P. Vs. Kone Elevators (India) Ltd. [(2005) 3

SCC 389 = 2005-TIOL-30-SC-CT-LB], the view

of the High Court was overruled.

• The three Judge Bench of the Hon’ble Supreme

Court applied the “Dominant nature test”

• Being aggrieved by the aforesaid order of

Hon’ble Supreme Court, the Petitioner preferred

a petition before the Hon’ble Supreme Court of

India under Article 32 of the Constitution. 1-6



It is held by the five Judge Constitution Bench of the

Hon’ble Supreme Court of India that four concepts have

emerged from various SC judgments, which are:

1. The Works contract is an indivisible contract but, by legal

fiction, is divided into two parts, one for sale of goods,

and the other for supply of labour and services;

2. The concept of “Dominant nature test” or for that matter,

the “Degree of intention test” or “Overwhelming

component test” for treating a contract as a Works

contract is not applicable

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3. The term “Works contract” as used in Clause (29A) of

Article 366 of the Constitution takes in its sweep all genre

of Works contract and is not to be narrowly construed to

cover one species of contract to provide for labour and

service alone; and

4. Once the characteristics of Works contract are met with

in a contract entered into between the parties, any

additional obligation incorporated in the contract would

not change the nature of the contract.

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CA Rajesh Saluja Lunawat & Co. 1-9

Form T-2 ?

• A consignment agent is receiving goods from another

state and selling them in Delhi. He only receives

commission on these sales. Is he liable to file Form T-2 ?

• An Exporter based in Delhi, purchased goods from

Mumbai against ‘H’ Forms and without bringing it to

Delhi it is transferred to Mumbai port. Is he required to

file Form T-2 ?

• A dealer purchased goods from Kerela against ‘C’ form

and on the way more than one vehicle is used to bring

the goods to Delhi. Which Truck no. would you fill in T-

2 ?


Form T-2 ?

• A registered dealer has sent goods to other state for Job

work and he is receiving back the goods. Is he liable to

file Form T-2 ?

• A registered dealer is receiving back goods in the form of

Sales Return. Is he required to file Form T-2 ?

• A registered dealer making E-I and E-II Sales. Is he

required to file Form T-2 ?

• A dealer has sent details through SMS which

subsequently change while the goods were being

dispatched. What should the Delhi dealer do?

• A user imports goods from outside Delhi for personal

use. Is he required to file Form T-2 ?


Form T-2 ?

• An unregistered dealer who wants to make first inter-

state purchase. Is he required to file Form T-2?


Banquet Halls

•What are the conditions when return (BE-

2) need to be filed

(i) a programme/ function to be organised in a banquet hall,

Farm house, Marriage/Party hall, Hotel, Open ground

etc.; and

(ii) food and/or liquor items are to be supplied/ provided;

and

(iii) cost of booking exceeds rupees one lakh per function

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Banquet Halls

•When return to be filed and for which

period

• Return to be filed 3 days before the fortnight.

For example return for the period 01.02.2014 to

15.02.2014 to be filed till 28.01.2014 and for the period

16.02.2014 to 28.02.2014 be filed till 12.02.2014.

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Provisions under DVAT regarding Food &

Beverages served in restaurant, banquet etc

• As per Rule 4A of DVAT Rules in case of "residential

hotels charging a composite sum for lodging and boarding

with breakfast/lunch/dinner" if the dealer do not have

sufficient documentary evidence to prove component of

taxable turnover of sales in composite sum then taxable

turnover will as follows:

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Provisions under DVAT regarding Food &

Beverages served in restaurant, banquet etc

• a) Where the composite charges include the 5% of composite charges

charges for breakfast.

• (b) Where the composite charges include the 10% of composite charges

charges for lunch.

• (c) Where the composite charges include the 15% of composite charges

charges for dinner

• (d) Where the composite charges include the 15% of composite charges

charges for breakfast and lunch

• (e) Where the composite charges include the 20% of composite charges

charges for breakfast and dinner

• (f) Where the composite charges include the 25% of composite charges

charges for lunch and dinner

• (g) Where the composite charges include the 30% of composite charges

charges for breakfast, lunch and dinner

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Goods sent on Job work

Do you need a form for sending/receiving goods on job

work?

Case –I

Goods sent to Haryana for job work and the Haryana party does

some value addition in terms of materials. What forms should be

used for sending the goods to Haryana and thereafter receiving them

back?

Case –II

Goods sent to Haryana for job work and the Haryana party only

does some value addition in terms of labour. What forms should be

used for sending the goods to Haryana and thereafter receiving them

back?


Challenges of Online Filing

• Online Filing has been made mandatory for the

following:

1. Surrender of RC - Central Form 10 not available online

2. Filing of amendments – Central Form 11, not available

online

3. Registration Process

4. Form T-2

5. Form 9 - Central Form 9, not available online

6. Filing of objections (optional)

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Downloading Forms

• Downloading Forms linked to pending tax

demands

• Demands on account of :

• Mismatch in claiming input credit

• Non-filing of central forms

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Filing Objection U/s 74

• Objection can be made against:

• An assessment made under this Act

• Any other order or decision made under this Act

• Important Points:

• Before filing an objection, the amount of Tax,

interest or penalty assessed that is not in dispute

must be paid, otherwise the objection shall be

deemed to have not been filed

• Only one objection can be made against any

assessment, decision or order 1-20



• Commissioner may direct the dealer to deposit a

part of the disputed demand – stay of demand.

• The objection shall be made within 2 months of the

date of service of the assessment of the assessment,

decision or order, as the case may be.

• The objection shall be made in DVAT 38 (New

Form)

• Condonation of delay can be made in DVAT 39

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• Three Sets including:

•Photocopy of Forms

•Copy of Order against which objection is being made

•Payment proof of agreed tax

•POA (one)

•Grounds of Appeal

•Facts of case

•Covering letter

•Fees of Rs. 50/- court fees stamp

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Challenging Issues

• Even if there is no mismatch showing in the dealer’s

login, still demands are being raised.

• Refunds are being cancelled suo-moto by VATO,

without giving opportunity of being heard.

• In some cases the refund cancellation orders are not

available with the department.

• In case of on-line registration process, a provisional

registration no. is generated, which is subject to VATI

visit and report, to be done within 15days of

application. Dependency on VATI and practically very

difficult to get this done in the given time. 1-23


• Thank you!

DVAT LATEST AMENDMENTS - Lunawat &...

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