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Penalties Under Delhi Vat Act

Penalties due to Tax Deficiency and Non Compliance of Provisions.

Tax Deficiency : Section 86 ( 1 ) – Difference between Tax Properly Payable in accordance with the provisions of the Act and the amount of tax paid in respect of the calendar month.

Tax Properly Payable includes the amount of tax u/s 32. It means tax assessed u/s 32 included in Tax Properly Payable.

Due tax paid after the period specified under sub-section ( 4 ) of section ( 3 ) is also a Tax Deficiency. Means tax as to be paid upto 21 pertaining to previous month, paid after 21 will be included in the definition of Tax Deficiency.

Penalties Due to Non-Compliance of Provisions
S.No. Section Cause of Penalty Quantum of Penalty
1. 86 ( 4 ) Fail to Apply Registration Rs.1000 per day maximum upto One Lakh
2. 86 ( 5 ) Fail to furnish Amendment Application Rs.500 per day maximum upto ten thousand
3. 86 ( 6 ) Fail to apply for cancellation of registration as
required u/s 22 (2) or fails to surrender
certificates of registration required u/s 22 (7)
Rs.500 per day maximum upto ten thousand
4. 86 ( 9 ) 1. Fails to furnish return by due date or
2. Fails to furnish with a return any other
document that is required to be furnished with
the return or
3. Fails to furnish revised return by the due date
or
4. Fails to comply with a requirement in a
notification issue u/s 70.
Rs.500 per day maximum upto fifty thousand.
Default in furnishing both retuns ( VAT &
CST ) attracts penalty upto one lakh.
5. 86 (13) Fails to prepare the prescribed or notified
records and accounts; Fails to retain the
prescribed or notified records at the principal
place of business as recorded in his certificate of
registration etc..
Penalty a sum of fifty thousand or twenty percent
of the tax deficiency if any whichever is greater.
6. 86 (14) Non compliance with the requirement u/s 59(2),
59(3) of the Act
Penalty Rs.50000.00
7. 86 (15) Prepares Records and Accounts in a manner that
is false, misleading or deceptive.
Penalty Rs.one lakh or the amount of tax
deficiency, if any, whichever is greater.
8. 86 (16) Issued Tax Invoice or Retail Invoice with
incomplete or incorrect particulars or has failed to
account it (Tax or Retail Invoice) correctly in his
books of account.
Rs.5000 or twenty per cent of the tax deficiency.
9. 86 (17) A person issues Tax Invoice for which he is not
authorized.
A person issues Tax Invoice for which he is not
authorized.
10. 86 (18) Non compliance of Section 49 i.e. fails to submit
Audited Balance Sheet upto stipulated time.
Penalty equal to one percent of turnover or one
lakh rupees whichever is less.
11. 86 (19) For Transporter – Being carried goods without
the documents or without proper and genuine
documents.
Penalty 20% for the value of such goods.
12. 86 (20) A person makes a statement to the
Commissioner which is false, misleading or
deceptive or omits from a statement without which
the statement is false, misleading or deceptive.
Penalty rupees fifty thousand or the amount of tax
deficiency whichever is greater.
13. 86 (21) Casual Dealer not applied for Registration within
stipulated period.
Penalty rupess five thousand per day subject to
maximum upto rupess one lakh.
14. 86 (22) Casual Dealer fails to furnish the return by the due
date or fails to furnish documents required to be
furnished with the return.
Penalty rupees one thousand per day subject to
maximum upto twenty five thousand rupees.
15. 86 (23) A person in any capacity organizes any
exhibition-cum-sale in Delhi and fails:-
(a) to furnish about goods brought or kept in
stock or sold by any participant before or during
or after the exhibition-cum-sale; or
(b) to ensure that all such participants have obtained registration under the Act and paid due
tax; or
(c) to permit inspection of the business
premises or goods or account and records of the
participants; or
(d) to permit inspection of the accounts and
records of the organizer in respect of the
exhibition-cum-sale.
Penalty rupees fifty thousand or a sum equal to
the amount of tax payable on such goods if such
goods were sold in Delhi, whichever is greater.
16. 86 (24) Residuary section – Any contravention under
any of the provisions of the Act or Rules for which
no penalty is separately provided under the Act.
Penalty rupees ten thousand.
17. 87 (5) The penalty has not been remitted in full after
objection and the person is subsequently
assessed to a further penalty in respect of the
same or a substantially similar failure occurring on
another occasion, the penalty otherwise due
under this Act shall be increased by
( i ) on first subsequent offence, fifty percent of
the specified penalty and
( ii ) on second and any further subsequent
offence, one hundred percent of the specified
penalty.
18. 95 Non compliance of section 95 in regard of not
providing name of Manager, IEC Code and PAN
Penalty rupees fifty thousand subject to a
maximum of fifty thousand rupees.
Penalties Due to Tax Deficiency
S.No. Section Cause of Penalty Quantum of Penalty
1. 86 (7) Falsely represent himself as a registered dealer Amount of tax wrongly collected or one lakh
whichever is the greater.
2. 86 (8) Voluntary Registered Dealer failed to undertake
activities within the period in his application or
has failed to comply with any of the restrictions or
conditions subject to which such (voluntary)
registration was granted.
Rs. ten thousand
3. 86 (10) Furnishes return a false, misleading or deceptive
in material or
Omits from a return furnished any matter or thing
without which the return is false, misleading or
deceptive in material.
Ten thousand or amount of the Tax Deficiency
whichever is the greater.
4. 86 (11) A dealer claims Tax Credit for which he is not
entitled or claimed greater tax credit than is
allowed.
Amount equal to Tax Credit or ten thousand
which is greater
5 86 (12) If Tax Deficiency arisen Penalty amount One percent of the Tax
Deficiency per week or rupees one hundred
week, whichever is higher, for the period of
default.