DVAT AMENDMENT ACT 2013 No. F.14(5)/LA-2013/Cons2law/65. Now no Input VAT Credit can be carried forward to next year ------- PRAGS

1. Delhi Value Added Tax Amendment Act 2013----
A Major Change

2. Amendment of Section 11 of DVAT Act:-
A Major Change
Bare Act:-
In the Principal Act, in section 11 for Subsection (2) the
following shall be substituted namely:-
(2) Where the net tax of a dealer calculated under
subsection (1) of this section amounts to a negative
value, the dealer shall:-
(a) Adjust the said amount in the same tax period against
the tax payable by him under the Central Sales Tax
Act, 1956 if any and

3. (b) Be entitled to carry forward the amount remaining after
application under subsection (2)(a) to next calender
month or tax period as the case may be of the same year,
or
Claim a refund of the amount remaining after application
under sub section (2)(a) at the end of the tax period of the
same year and commissioner shall deal with the
refund claim in the manner described in section 38 and
section 39 of the act.

4. Explanations:-
(1) Refund can be claimed at the end of the tax period only.
(2) Excess tax credit should not be carried forward to the next
year
(3) Refund of excess tax credit carried forward from previous
year should be claimed in any of the remaining tax period
of 2013-14 but not later than the last tax period ending on
31-03-2014.
(4) Excess tax credit remaining at the end of a tax period can
either be claimed as a refund or carried forward to next tax
period of the same year.

5. Explanations continued:-
(5) “Excess payment made inadvertently shall also be treated
as credit in a month or tax period as the case may be”.
Analysis:-
(1) Now as per the changes in section 11 we wont be able to
carry forward the Input tax credit from one year 31-03-2014
to another financial year.(1-4-2014 onwards) i.e. we will not
have any tax credit to be carried forward to the next year.
We have to take refund of excess Input tax lying in our
account as on 31-03-2014.

6. Analysis:-
(2) Now we can carry forward the credit in the following
manner:-
Period BalanceInputCreditAvailable Carriedforwardto Allowed
April2013toJune2013 60,685 July2013toSeptember2013 Yes
July2013toSeptember2013 40,555 October2013toDecember2013 Yes
October2013toDecember2013 65,256 January2014toMarch2014 Yes
January2014toMarch2014 5,26,522 April2014toJune2014
NOTALLOWED.
CompulsorilyRefundwill
havetobetaken

7. Analysis:-
(3) Earlier you can use:-
 Input Tax Credit of Local sales tax against the output
liability for Local Sales Tax.
 Output of Central Sales Tax Liability can be adjusted
against Input of Local sales tax.
Now also equilibrium is established by the department and
now also you can adjust your all Local and Central VAT
liabilities againt the local input VAT Credit, then balance
amount can be claimed as a refund.

8. Analysis:-
(4) Please be careful while applying for refund. Commissioner will
be dealing with the cases of refund in the manner described in
section 38 and 39 of the Act.
Department has issued guidelines for speedy disposal of refund
cases through ECS but in the mean time has also decided to pick
up 10% cases for audit on a perimeter decided by department.
(5) Since this change has come from this year only. So we will be
getting refunds of all of our previous years after setting off the
liabilities collectively at the end of this year only.i.e. 31-03-2014,
So in the returns of 1-1-2014 to 31-03-2014 department is expected
to give heavy refunds.

9. Analysis:-
(6) It might be the reason that the government is moving
towards GST (Goods and Service Tax), Since a major
hurdle for applicability of GST is “HOW TO CARRY
FORWARD THE BALANCES OF INPUT TAX CREDIT?? ’’
is getting solved.
Now this issue will also be resolved through this
amendment.
It may also encourage other State VAT Departments to
also apply for the same.
Lets Wait and watch.

10. For Any Queries Contact Us on :
PRAGS & Co.
Chartered Accountants
D-1/179 New Kondli Near Vasundhra Enclave Delhi-96
(O) 011-22-61-1001
(M): 8447055086,9999972014,9968227574
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