Customer Care No.

91-1145562222

New composition scheme

of Tax of 5% under Delhi
VAT
www.taxmann.com

A new composition scheme has been notified

under the Delhi VAT Act Vide Notification No.
F.3(29)/Fin(Rev-I) 2015-2016/dsvi/93 dated
18.3.2016 with effect from 1.4.2016 for every
registered dealer (i)whose turnover during the preceding year as
well as expected turnover during current year
does not exceed Rs.50 lacs; and
(ii)who is not making any sales other than that of
ready to eat foods and non-alcoholic beverages
including cooked food, snacks, sweets, savouries,
juices, aerated drinks, tea & coffee etc. and
served in or catered indoors or outdoors by
hotels, restaurants, sweet-stalls, sweet shops,
clubs, caterers & any other eating houses.

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Such dealer may elect for the new composition scheme and pay
tax @ 5% of the entire turnover. The electing registered dealer
shall comply with the conditions and restrictions specified in this
notification, such as, (a) He shall not be eligible for making purchases from or procuring
goods from or making sales to or making supplies to any place
outside Delhi;
(b) He shall not be eligible for making purchases from a person
who is not registered under the DVAT Act except in the case of
goods specified in the First Schedule;
(c) He shall not be eligible to claim tax credit under section 9 of the
Act;
(d) He shall not calculate his net tax under section 11 of the Act;
(e) He shall not collect any amount by way of tax under the Act;
(f) He shall not be entitled to issue 'Tax Invoices'.

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A registered dealer, who is paying tax under section 3 of the Act (as a normal dealer), can opt for
payment of tax under this scheme by filing an application in Form RH-01 within a period of 30 days from
the first day of the year with effect from which composition is opted. For the year 2016-17, application
for composition under this Scheme could be filed up to 30thApril 2016
A dealer applying for a fresh registration can also opt for this scheme by filing application in Form RH 01
along with his registration application in Form DVAT 04.
As per second proviso to Section 16(1) of the DVAT Act (inserted w.e.f. 1.4.2013), where a separate
composition scheme has been notified u/s 16(12), those dealers cannot elect for general composition u/s
16(1) of 1%. Therefore, where any dealer, covered by this notification, has already opted for composition
scheme u/s 16(1) of the Act, such dealer shall mandatorily withdraw from the composition scheme w.e.f.
1.4.2016 by filing application in Form DVAT-03 upto 30.4.2016. However, such dealer can opt for the new
composition scheme of 5% specified through this notification.

Customer Care No. 91-11-

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Customer Care No. 91-11-

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