To reduce voluminous paper work which is causing harassment
NEW DELHI: The All India Tax Advocates Forum has urged the Delhi Government to further simplify the Delhi Value Added Tax (DVAT) Act, 2004, to reduce voluminous paper work which is causing undue harassment to small time traders and businessmen.
Recent amendments made by the Government to Sections 9 and 10 will only increase the paper work manifold and are not in tune with the overall philosophy of the VAT Act, said Forum president M. K. Gandhi on Saturday.
He said ever since the introduction of the Delhi VAT Act, 2004, the dealers had been burdened with more paper work which has increased their cost of operation.
Mr. Gandhi said the amendment carried out to Section 9(1) of the Act restricted the eligibility of Input Tax on the closing stock held by the dealers at the end of the tax period. This will result in a cumbersome exercise of maintenance of various types of purchases and the sales thereof.
The amendment seeks to provide that the tax credit in respect of the turnover of purchases occurring during the tax period not be allowed at the time of purchase, but it will be allowed to the extent of proportion of goods which have been put to sale. In practical sense these amendments restrict the eligibility of input tax credit on unsold goods, Mr. Gandhi said.
“Thus it creates complexity in computation of input tax credit which can only be possible if comprehensive stock record and a one-to-one co-relation of goods is maintained by each dealer. Such a task is cumbersome and it will be impossible for a small businessman to keep such records,” he said.
In this context, the Forum has suggested simplification of the whole process by adopting a procedure like CENVAT Credit Rules, which according to it is a time-tested formula.