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DVAT Registration

20 May
DVAT Registration

DVAT Registration

DVAT Registration

Delhi VAT Registration is also called DVAT Registration so today we explain you “How to Apply for Delhi VAT Registration in 2016” with the Latest Process. its also include cover the aspects of CST. Mostly VAT is required for any business which is selling goods in India even Online or Offline. VAT is the necessary part of any business.

Delhi Value Added Tax or in short DVAT is a tax applicable on sale of goods within Delhi. Any person with turnover within Delhi exceeding Rs. 20, 00,000 is required to be registered under DVAT and is liable to collect and pay DVAT tax to the Delhi Government. Further, any person purchasing or selling good from/to outside Delhi is also liable to be registered under DVAT in addition to registration under Central Sales Tax Act (CST).

A person can also apply for voluntary DVAT registration with or without CST even if he is not required take compulsory registration.

There are two types of DVAT registration i.e.

  • Normal DVAT Registration
  • Registration under DVAT Composition Scheme

Applicability of DVAT Composition Scheme

 Concept of composition scheme:-

In order to minimize the compliance burden on small dealers a single tax rate is fixed at a low level which is directly linked with the turnover amount. The input credit is not allowed to these classes of dealers against purchases made and restriction is put on issuance of tax invoice.  The rate of tax in the newly notified scheme is 5% on the turnover amount which seems to be on a very high side because tax rate on sweets and namkeen is also proposed to be reduced in annual budget 2016-17. In this article we will discuss each and every aspect of the scheme in detail including applicability of relevant forms.

Who is eligible under this scheme?

  • Every registered dealer whose turnover during previous year or expected turnover during current year does not exceed 50 lakhs rupees.
  • The dealer is making sales of ready to eat foods, non alcoholic beverages (soft drinks, juices etc), cooked foods, snacks, sweets, savouries, juices, aerated drinks, tea and coffee etc.
  • The above food items can be served in hotels, restaurants, sweet shops, clubs, caterers and at any other eating house.

Conditions for availing composition scheme:-

  • The dealer shall not be eligible to purchase or sales any goods outside Delhi.
  • Not eligible to purchase any goods from unregistered dealers except the goods mentioned in first schedule.
  • Not eligible to book credit under section 9 of DVAT Act, 2004.
  • Not entitled to issue tax invoice to any purchaser.
  • Not eligible to claim net tax under section 11 of Delhi VAT and cannot recover any amount on account of tax.

Other important conditions of the scheme:-

  • Continue to retain copy of all invoices for all his purchases and copies of all retail invoices issued by him in respect of his sales as required under section 48 of the act.
  • Once a dealer has started to pay tax under this scheme shall not be eligible to withdraw the scheme subject to the conditions given in section 20 of the DVAT Act, 2004.
  • This scheme is applicable with effect from 01-04-2016 and the dealers who are paying taxes under section 3 of the VAT act may join this scheme by filing form RH-01 within 30 days from the first day of the FY for which composition scheme is opted. The ITC availed on opening stock shall be waived by the dealer once the composition scheme is opted and the proof of payment in form DVAT-20 along with Form RH-02 shall be furnished.
  • The dealers who are no more interested in the composition scheme can opt out of the scheme by simply filing form RH-03 within 30 days from the end of the FY for which composition scheme was opted. The ITC on closing stock at the end of FY can be reclaimed by them at the rates prescribed in section 04 of the DVAT Act, 2004.

Shifting from existing composition scheme:

The dealers who are presently covered in general composition scheme as per sub section 1 to 11 of section 16 and they are also covered in the class of dealers prescribed in this scheme has to mandatorily switch to this scheme by withdrawing from existing scheme by filing form DVAT-03. If these classes of dealers are not interested in composition scheme can file returns as per normal procedure. This option is time bound in law and need to be exercised mandatorily by 30th day of April 2016. The above provision can be explained with the help of an illustration where a small sweet shop having turnover up to 50 lakhs has already availed normal composition scheme and paying flat tax @ 1% of their turnover has to withdraw from this scheme and either avail new composition scheme and pay tax @ 5% or adopt the normal route and pay tax under section 3 of the DVAT Act, 2004.

Trigger points for withdrawal from scheme:-

In the following circumstances the dealers who have opted to pay tax under this scheme had to mandatorily withdraw from the scheme.

  • Turnover of the dealer exceeds 50 lakhs rupees at any point of time during the previous year for which scheme is opted. The dealer has to file form RH-03 to give intimation of this fact that turnover has crossed threshold limit.
  • The dealer who has defaulted to file two consecutive tax returns by the due date shall not eligible to pay tax under this scheme and have to pay tax under normal scheme under section 3 of the DVAT Act, 2004 with effect from the first day of the next month for which default has been committed.


The scheme has been announced for the small dealers but the rate of tax has been fixed at a very high level which might not attract the dealers to join this scheme. To simplify the compliance burden for small dealers and make the scheme more attractive Govt. should reduce the rate of tax in the scheme.

Documents required for DVAT Registration of Proprietorship Concern

1. PAN card of Applicant
2. Address Proof of Applicant (Voter ID, Passport, Driving License)
3. Aadhar Card / Election ID of Applicant ( Mandatory)
4. Bank Account authentication Details (Cancelled Cheque)
5. Registered Office Address Proof:
If Rented: Rent Agreement
If Owned: Ownership proof
6. Utility Bill like electricity bill, property documents supporting the Registered address proof
           If Electricity bill is not in your name – you can attach No Objection Certificate
7. Four photographs of Applicant
8. Rubber Stamp

Documents required for DVAT Registration of Company / Partnership Firm / LLP

1. Pan of Company / Firm
2. MOA/AOA of Company / Partnership Deed of Firm
3. Board Resolution Authorizing director to apply for Sales Tax Registration
4. PAN of all directors / Partners
5. Address Proof of all directors / Partners (Voter ID, Passport, Driving License)
6. Aadhar Card / Election ID of atleast 1 Director / Partner ( Mandatory)
7. Bank Account authentication Details (Cancelled Cheque)
8. Registered Office Address Proof
If Rented: Rent Agreement
If Owned: Ownership proof
9. Utility Bill like electricity bill, telephone bill, property documents supporting the Registered address proof
If Electricity bill is not in your name – you can attach No Objection Certificate
10. Four photographs of all Directors / Partners
11. Rubber Stamp of Firm / Company


1. Apply for PAN Verification with the Department of Trade and Taxes
2. Fill DVAT -4 Online, Using ID issued by Department of Trade & Taxes
3. The duly attested hardcopy of the DVAT-4 to be submitted to the department with all relevant documents within 3 Working days.
4. The department issues the Registration order in form of DVAT -6, which is sent by post to the Registered Office.
5. A physical verification of the premises is also conducted by the Inspector validating authenticity of the premises.

Documents to be given to VAT Inspector at the time of Visit

1. Copy of DVAT-04 Application
2. Copy of Challan
3. Photocopy of PAN card of Proprietor / Company / Firm / LLP (Originals to be shown)
4. Photocopy of PAN card of all Director’s / Partner’s (Applicable in case of Companies / LLP) (Originals to be shown)
5. Photocopy of Address Proof (Voter id or Passport or Driving License or Aadhar of Proprietor / Director’s / Partner’s) (Originals to be shown)
6. Cancelled Cheque
7. Photocopy of Electricity Bill along with Rent Agreement / NOC (Originals to be shown)
8. Photographs of Proprietor / Director’s / Partner’s


1. A perfect system of VAT is a perfect chain where tax evasion is difficult.
2. VAT facilitates precise identification and rebate of the tax on purchases and thus ensures that there is no cascading effect of tax.
3. Under a VAT system, the buyer knows, out of the total consideration paid for purchase of material, what is tax component. Thus, the system ensures transparency also.
4. VAT does not have any inflationary impact as it merely replaces the existing equal sales tax. It may also be pointed out that with the introduction of VAT; the tax impact on raw material is to be totally eliminated.

Rate of Tax on Commodities under Delhi VAT

Every business established in India needs to obtain certain tax registrations keeping in view the nature of business carried on by them. The non registration under any applicable tax registration attracts heavy penalties. Generally business are not aware of the various tax registration they actually need to have to undertake their business and moreover obtaining tax registration may be at times , a cumbersome process, as it involves preparing registration application & other related documents, coordination with tax officials.

Sales tax is paid on monthly basis before the 21st of following month

Due date for filing VAT Return in delhi is 25th or 28th  of Next Month following the quarter
Example For Quarter 1 ( April – June) Due date for filing return is 25th of July


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