The Arvind Kejriwal Government approved amendments in the Delhi Value Added Tax Act in the Cabinet meeting on Wednesday following which traders will have to face two-year imprisonment for violation of VAT to the tune of Rs one crore.
Currently, it is a cognisable offence with maximum punishment of six months.
Also, the amendment grants power to VAT Commissioner to set up special designated court for
VAT violators and appoint special public prosecutor to prosecute them.
The Cabinet has also approved digital signature mandatory for traders while filing returns to the department to make VAT office paperless.
This was the second Cabinet meeting by the Kejriwal Government in three days to approve the proposal. Now, the amendment Bill will be tabled in the House on Thursday and passed by Friday. The new amendment will help the Government to tighten noose around the trading community, said sources, adding that the move is bound to lead to confrontation with lieutenant-Governor Najeeb Jung as amendment needs prior approval from the
Raj Niwas.
Top sources told The Pioneer that the Cabinet has approved the amendment in the VAT Act for setting up special designated VAT court, appointment of special public prosecutor for VAT violators.
The Pioneer had earlier reported that the Delhi Cabinet discussed the issue. Currently, all provisions for violation of tax are bailable offence.
After the Cabinet approval, VAT Commissioner SS Yadav has held a high-level meeting with VAT officials and apprised them about the amendments in the act.
“All records, books of accounts, registers and other documents, maintained by a dealer, transporter or operator of a warehouse shall, at all reasonable times, be open to inspection by the Commissioner,” said the proposal.
“The Commissioner may authorise either generally or in respect of a particular case or class of cases any officer or person subordinate to him to investigate all or any of the offences punishable under this Act. Every officer or person so authorised shall, in the conduct of such investigation, exercise the powers conferred by the Code of Criminal Procedure, 1973 (2 of 1974) upon an officer in charge of a police station for the investigation of a cognizable offence,” the proposal said.
The VAT growth rate in Delhi has continued to dip despite the Government hiking VAT on petrol and diesel and bringing officers of their own choice in the Trade and Taxes Department. The total collection of VAT is Rs 12,850 crore till November this year. The gap between Rs 12,850 crore and Rs 11,250 crore is huge and only four months have been left in the current financial year, said sources.
The main reason for the drop in VAT collections is being attributed to the fact that there was trust deficit between the Government and its top bureaucrats ultimately taking its toll on the day-to-day functioning of the Delhi Government. The VAT Department is finding difficult to meet the target of Rs 24,000 crore in the current fiscal year. The VAT target was increased from Rs 18,554.91 crore, it had raised in the previous financial year to Rs 24,000 crore in 2015-16. After assuming the charge of the CM in February this year, Kejriwal had assured traders and businessmen that unnecessary raids would be stopped but they should honestly pay taxes to the Government.