Amend Delhi VAT Act

The All-India Tax Advocates Forum has urged the Delhi Government to amend the Delhi Value Added Tax Act stating that it is not trader friendly and has led to more paper work and erosion in the distributive character of Delhi.

With minor lapses being punished with severe penalties, the Forum has stated that the Act has given unbridled arrest and investigation powers to the officials and these were likely to be misused against the trading community.

Forum president M.K. Gandhi has also stated that a white paper of the Central Government on VAT had given a guideline which stated that while enacting the law it would be ensured that the penal provisions would be akin to the old Sales Tax Act of Delhi. He said there was a strong case for implementation of these guidelines and for making suitable amendments in the DVAT Act at the earliest.

Reiterating that an offence against VAT law was essentially of civil nature and needs to be so treated, the Forum president said the penal provisions as of date are harsh and there was a need to amend these on the lines of the Delhi Sales Tax.

The Forum has also advocated amendments in the DVAT Act on these lines. It has also suggested summary procedures that may be suitably provided either in the Act itself or under the rules for attending to such offences. The guiding principle, however, has to be that of the natural justice, it added.

The Forum has further advocated amendment to default penalty and default assessment and for having a provision for hearing before the final order. It is a settled principle that the penalty has to be commensurate with the offence and Section 86 is yet another provision which needs amendment, its president said.

Seeking a complete review of the DVAT Act, the Forum has stated that in such a review the petitioners need to be given an opportunity to point out the difficulties and remedial measures thereof. Mr. Gandhi has also called for reducing avoidable paper work which the traders are being forced to undergo.