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| What
is Value Added Tax (VAT)? |
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| It is a form of indirect tax
and is in the nature of multi-point sales tax. In India,
it is the replacement of existing sales tax structure;
the only difference is manner of levy. |
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| Who
is a person liable to pay tax? |
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Any person who, for
the purposes of or consequential to his engagement in
or in connection with his business, buys or sells goods
directly or otherwise, whether for cash or for deferred
payment or for commission, remuneration or other valuable
consideration and includes. |
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A factor, commission
agent, broker, del credere agent or any other mercantile
agent. |
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A non-resident dealer or his
agent. |
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An auctioneer. |
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A club, association, society
and co-operative society. |
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Casual trader. |
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Any person who disposes any
goods as unclaimed or confiscated, or unserviceable
or scrap, surplus, old, obsolete or as discarded
material or waste products by way of sale. |
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Banking and insurance companies,
if they buy, sell or supply goods. |
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| Transactions liable for tax under the DVAT Act
– Sale [Section 2(1)(zc)] |
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| The term “sale” in DVAT Act covers the following
transactions in its ambit: |
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Transfer of property
in goods by one person to another. |
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Transfer of property by auctioneer,
banks and insurance companies. |
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Transfer of goods on hire purchase
or other system of installments. |
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Supply of goods by a society
(including co-operative society), club, firm, or
any association to its members. |
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Transfer, otherwise than in
pursuance of a contract, of property in any goods. |
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Work contract transactions. |
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Leasing – Transfer of
right to use goods. |
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Supply, by way of or as part
of any service or in any other manner, of goods,
being food or any other article for human consumption. |
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Every disposal of goods as unclaimed
or confiscated, or unserviceable or scrap, surplus,
old, obsolete or as discarded material or waste
products. |
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| Compulsory Registration |
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| Every dealer is required to
apply for registration under this Act if:- |
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| Taxable Quantum |
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Section |
Circumstances |
Taxable
Quantum (Rs.) |
a |
16A(7) |
Casual trader as defined
u/s 2(1)(g) |
NIL |
b |
18(2) |
Dealer who imports
any goods for sale in Delhi |
NIL |
c |
18(2) |
Any other dealer |
10,00,000.00 |
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In case of dealers who are engaged in works
contract activities, taxable quantum means
the gross turnover, that is, the turnover
before deducting therefrom amount of labour
and services.
In accordance with section
18(3) of the Act, taxable quantum of a dealer
shall not include turnover from:- |
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A) |
Sales of
capital assets. |
B) |
Sales made in course
of winding up of dealer’s activities. |
C) |
Sales made as part of
the permanent diminution of the dealer’s
activities. |
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