Delhi restaurant/ halwai to stop composition @ 1% u/s 16(1)

By | June 1, 2016






CIRCULAR NO 08 of 2016-17

Dated: 30/05/2016

Subject: New Composition Scheme for Restaurants and Halwais

A new Composition Scheme under section 16(12) of the DVAT Act was recently introduced vide notification No. F.3(29)/Fin.(Rev-l)/2015-16/dsvi/93 dated 18/03/2016, wherein the registered dealers whose annual turnover is upto ₹ 50 Lakh and who make sales of cooked food, snacks, sweets,  savouries, juices,  aerated  drinks,  tea  and  coffee  etc. (i.e. who  are engaged  in restaurants/halwai business) were given an option to pay composition tax @ 5% w.e.f. 1st April, 2016. In view of the second proviso to section 16(1), such dealers, who were earlier opting composition @ 1% under section 16 (1) were mandatorily required to opt out of the composition w.e.f. 1st April, 2016 by filing Form DVAT-03 upto 30th April, 2016 and to pay tax as a non-composition dealer as per the provisions of the DVAT Act or to opt to the new Composition scheme @ 5% by filing Form RH-01 alongwith the Form DVAT-03 (for withdrawal of composition @ 1%) upto 30th  April, 2016. A dealer engaged in restaurant/ halwai business who is still continuing with composition @ 1% under section 16(1) after 31st March, 2016 is not only liable to pay due tax as per the rates specified in section 4 of the DVAT Act as a non-composition dealer but also liable to pay penalty under section 86(24) for contravening the provisions of the DVAT Act.

Therefore, in view of above, all Zonal Addl. Commissioner/Jt. Commissioners and also the Ward  VATOs/ AVATOs are  hereby directed  to  ensure that  no such dealer (engaged  in restaurant/halwai business) is continuing with composition of tax @ 1% under section 16(1) after 31st March, 2016 and if found so appropriate action against such dealers for recovery of due tax and penalty may be initiated as per the statutory provisions of the DVAT Act.

This issues with the approval of Commissioner, VAT.

(R.K. Mishra)

Spl. Commissioner

Related Post

  1. Delhi Govt Composition Scheme for Hotels / ready to eat food seller
  2. Delhi Govt revised ratio of auto-downloading of central statutory forms
  3. Delhi restaurants & Halwais, migrating to new composition scheme, need not to pay tax on opening stock
  4. Delhi Sugam 1 for inter state movement of goods, Form T-1 discontinued
  5. Delhi Sugam 2 mandatory to be produced before check post while entering goods into delhi
  6. Display of Certificate of Registration : Delhi Vat
  7. Return with digital signatures in Delhi Vat w.e.f 01.04.2016
  8. Third Schedule of Delhi vat changed w.e.f 10.5.16
  9. Form GE-II : Purchases upto Rs 1000 not required in Delhi Vat
  10. VAT deduction at source in respect of works contract by Govt Dept under Delhi VAT
  11. Delhi VAT new directions for Scrutiny of Returns
  12. Delhi Vat -Amendment in Rule 28 Dealer’s periodic Returns
  13. Delhi Vat Act – Framing of central assessments
  14. DVAT 16 , 17 , 30 and 31 w.e.f 12.04.2016
  15. DVAT Dealer need not to submit DVAT 56 acknowledgement if return filed with Digitial Signatures
  16. Renovation of hotel is in the nature of revenue expenditure
  17. Central Sales Tax Delhi Amendment Rules 2015


Leave a Reply