In a major relief to city’s traders, Delhi government on Tuesday passed an amendment to the Value Added Tax (VAT) Act which will allow them to carry forward their credit for successive financial years.
While presenting the proposal of the amendment, Deputy Chief Minister Manish Sisodia said that traders were forced to claim refund, if any before the end of each financial year on March 31, on the Input Tax paid by them.
“This was a cumbersome process and traders faced the apprehension of lapse of any refund amount in case they failed to claim the reimbursement,” he said. The proposal was passed with a voice vote in the House.
As per earlier provisions, a trader used to carry forward the excess tax credit during the same year only. The trader had to claim refund of such excess tax credit in his return for the last quarter of that year.
The traders felt that this restriction curtailed their freedom to carry forward the excess tax paid. Since this amendment was carried out in September, 2013, a number of traders used to refund during the last quarter of financial year 2013-2014.
But with this amendment, it will allow traders to carry forward the excess tax credit to next year to adjust the output tax liability in the next tax period.