The Government of Delhi has joined the growing list of governments at the Central as well as State level by announcing an Amnesty Scheme for State tax dues. The Delhi Tax Compliance Achievement Scheme, 2013 (“Scheme”) has been notified vide Notification No F3 (16)/ Fin (Rev-I)/ 2013-14/ ds VI/ 786 on September 20, 2013 with a view to incentivize taxpayers to voluntarily declare and pay unassessed tax dues as well as settle assessed tax dues pertaining to the period upto March 31, 2013 and remaining unpaid as on August 31, 2013.
Coverage of the Scheme
The scheme covers tax liability under the following enactments:
· Liability pertaining to the period April 1, 2005 to March 31, 2013 arising under:
- Delhi Value Added Tax Act, 2004 (‘DVAT Act’) including works contract tax deduction at source (“TDS”) liability covered under Section 36A of the DVAT Act
- Central Sales Tax Act, 1956 (‘CST Act’)
· Liability pertaining to the period prior to April 1, 2005 arising under:
- CST Act
- Delhi Sales Tax Act, 1975
- Delhi Sales Tax on Works Contract Act, 1999
- Delhi Sales Tax on Right to Use Goods Act, 2002
- Delhi Tax on Entry of Motor Vehicles into Local Areas Act, 1994
The scheme covers the following dues under the above mentioned enactments:
· Unassessed tax dues determined by the declarant at rates applicable at relevant periods;
· Assessed tax dues pending under adjudication/ litigation (up to the Supreme Court level) along with interest quantified in the notice/ order; and
· Works contract as well as works contract TDS liability at rates prescribed under the Scheme.
Benefits offered by the Scheme
· The Scheme offers immunity from re-opening of proceedings in respect of the taxes declared as well as immunity from prosecution and payment of penalty and interest (i.e., over and above the assessed/ quantified interest paid under the scheme). The immunity from penalty and prosecution proceedings extends to all offences covered under the respective Acts such as non-registration, non-furnishing of returns in time etc.
· From a works contract TDS perspective, the Scheme offers immunity to the deductor as well as deductee if either of them opts under the Scheme.
· The Scheme further promises confidentiality including an assurance that disclosures made under the Scheme shall not be shared with any person, government department/ agency.
· Pursuant to availment of the Scheme, all statutory proceedings in respect of the tax dues pending before quasi – judicial forums up to the stage of tribunal shall be deemed to have been withdrawn; and matters pending before the High Court or the Supreme Court shall be permitted to be withdrawn upon an application for withdrawal being filed.
Procedure for opting under the Scheme
· Every person who intends to make a declaration under the Scheme is required to obtain registration (Tax Identification Number/ Tax Deduction Account Number), if not already obtained.
· A person intending to opt under the Scheme is required to submit a declaration in the prescribed form to the designated authority on or before January 31, 2014.
· The declarant is required to pay the tax dues (as prescribed under the Scheme) in two installments:
- Not less than fifty percent of tax dues at the time of filing the declaration; and
- The balance amount by March 21, 2014
· In addition to the above, unregistered dealers making a declaration under this scheme are required to pay net tax for the period commencing April 1, 2013 upto the date of obtaining registration.
· The filing of the declaration shall be acknowledged by the designated authority within a period of fifteen workings days from its receipt.
Safeguards built into the Scheme
· No refund of the tax paid under the Scheme shall be available; and in cases where a declarant fails to pay a part of the tax dues, the same shall be recoverable along with interest, under the provisions of the DVAT Act.
· Where the Commissioner, for reasons to be recorded in writing, believes or is satisfied that the declaration made is false in material particulars, he may serve a show cause notice on the declarant, within a period of 1 year from the date of declaration, seeking to recover the dues unpaid or short paid under the Scheme, in respect of the period beginning from April 1, 2009.
· Further, where a declaration is found to be substantially false, the Commissioner shall, within three months of issuance of show cause notice (mentioned above), make an assessment of the tax due. Credit of taxes paid under the Scheme shall be given in such assessment.
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