Form BE-1 & BE-2 under DVAT

Discussion on BE-1 & BE-2

Purpose of this blog

Objective of this blog is to discuss and have better understanding about the applicability, provisions etc. of Notification No.F.3(393)/Policy/VAT/2013/1086-1096 dated 19.12.2013 according to which now owners/lessee/custodian of the venue for functions/ programmes to be organised are required to file fortnightly return in advance for details of bookings for next fortnight. Link for the Notification, FAQ etc. here below

1. Notification No.F.3(393)/Policy/VAT/2013/1086-1096 dated 19.12.2013

2. Notification No.F.3(393)/Policy/VAT/2013/1137-1147 dated 27.12.2013

3. FAQ issued by DVAT deptt. on DVAT website

In this post :

ACT means Delhi Value Added Tax Act, 2004. 

Rules means Delhi Value Added Tax Rules, 2005. 

CST Act means Central Sales Tax Act,1956.

CST-Rules means Central Sales Tax (R&T) Rules,1957

CST-Delhi Rules means Central Sales Tax (Delhi) Rules,2005

Provisions under DVAT regarding Food & Beverages served in restaurant, banquet etc.

Let us first go through the various definitions, provisions under DVAT relating to serving of Food etc.

Sec 2 (zc) (vii) of DVAT Act-      sale......includes.....supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink ( whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration.

As per Rule 4A of DVAT Rules in case of "residential hotels charging a composite sum for lodging and boarding with breakfast/lunch/dinner" if the dealer do not have sufficient documentary evidence to prove component of taxable turnover of sales in composite sum then taxable turnover will as follows:(a)  Where  the  composite  charges  include  the                                  5%  of  composite charges

       the charges for breakfast.                                                             

(b)  Where  the  composite  charges  include  the                                  10%  of  composite charges

       charges for lunch.                      

(c)  Where  the  composite  charges  include  the                                  15%  of  composite charges 

      the charges for dinner

(d)  Where  the  composite  charges  include  the                                  15%  of  composite charges 

      the charges for breakfast and lunch

(e)  Where  the  composite  charges  include  the                                  20%  of  composite charges 

      the charges for breakfast and dinner

(f)  Where  the  composite  charges  include  the                                  25%  of  composite charges 

      the charges for lunch and dinner

(g)  Where  the  composite  charges  include  the                                  30%  of  composite charges 

      the charges for breakfast, lunch and dinner

other then above there are no specific provisions under DVAT in relation to serving of food and beverages. So normal provisions will apply.

Now we'll analyse each and every aspect of the Notification dated 19.12.2013 as amended by notification dated 27.12.2013.

Who is required to file return

Owner/lessee/custodian of the venue is required to file the return .

What are the conditions when return need to be filed

(i) a programme/ function to be organised in a banquet hall, Farm house, Marriage/Party hall, Hotel, Open ground etc.; and

(ii) food and/or liquar items are to be supplied/ provided; and

(ii) cost of booking exceeds rupees one lakh per function 

So all the 3 conditions must be fulfilled then only return in BE-2 need to be filed.

Any exemption for small functions

Yes, return need to be filed for programme/ fuctions whos booking value exceeds rupees one lakh.

When return to be filed and for which period

Return to be filed 3 days before the fortnight. For example return for the period 01.02.2013 to 15.02.2013 to be filed till 28.01.2013 for for period 16.02.2013 to 28.02.2013 be filed till 12.02.2013. So here a point to be noted that due date filing the return for the 2nd fortnight of the month will be 12 of that month, but for the first fortnight due date will be not 28th of every month as in case of 1st fortnight of March due date will 25 February and for first fortnight of May due date will be 27 of April.

What is the first tax period for which return to be filed

As per Notification No..F.3(393)/Policy/VAT/2013/1086-1096 dated 19.12.2013 this is applicable from first fortnight of January,2014 . But it has been amended by Notification No.F.3(393)/Policy/ VAT/ 2013/ 1137-1147 dated 27.12.2013 and now it is applicable from second fortnight of January,2014. Hence first return need to be filed till 12.01.2014.

What is the procedure for registration for owner/lessee/custodian

Owner/lessee/Custodian has to get them enrolled with the DVAT department by filing information in Form BE-1. After that department will issue a enrollment number which will be used for all filing purposes etc. There is no last date has been specified for filing BE-1 so it can be filed within a reasonable time so that department can issue enrollment number and return can be filed till due date. It is important to note that even if such owner/lessee/custodian is registered under DVAT Act and having TIN, still he need to get enrollment number for this purpose.

What are forms provided for registration and return

Information for enrollment to be filed in Form BE-1 and return to be filed in Form BE-2.

Below is FAQ issued by DVAT department ( available on website of the department)

1 Queries: Advance Information about booking from Banquet Halls, Farm Houses,

Marriage/ Party Halls, Hotels, Open Grounds, in Form BE-1 & BE-2

1. What shall be the due date to file BE-1?

BE-1 form is meant for enrolment of owner/ custodian of the venue. The scheme is

being implemented w.e.f. 1st January, 2014. As such, the eligible persons are required

to file the information 3 days before. Hence enrolment should be done on or before

that date. For the first return, the enrolment should be done by 27th December, 2013.

A unique enrolment number shall be given by the Department once the form BE-1 is

submitted to the Department.

2. Whether any electronic receipt shall be issued for filing BE-1 and BE-2?

No. To begin with, the eligible persons have to file both BE-1 & BE-2 manually ( now option for online filing of BE-1 is available on DVAT Deptt. website) and get the duplicate copy stamped from the office of concerned Zonal Addl. /Jt. Commissioner of the Department. In future, online facility would be provided for the

same.

3. Shall the Department issue an enrolment number immediately on submission, or a

separate certificate shall be given later on?

An enrolment number may be obtained on the next working day of filing manual BE-

1. The concerned zonal in-charge shall take this unique number from Addl.

Commissioner (System) and pass on to the applicant on the next working day (to be

recorded on the duplicate copy of BE-1). Later on, after switching over to electronic

mode, an enrolment certificate would be issued and delivered to all eligible entities.

4. Whether it will be mandatory to mention this enrolment number (if any) on any

stationery?

Yes. It will be mandatory to mention the enrolment number on return form BE-2 and

for all future correspondence with the Department.

5. Whether any separate certificate shall be issued on submission of BE-1?

As replied at (iii) above, the separate certificate would be issued later.

6. When revising BE-2

(a) How to mention whether it is revised or original?

No need to mention any word on the original. However, on revised return, word –

'Revise' may be mentioned. In the electronic mode, facility of drop down shall be

provided.

(b) Where to mention change of information (No column exists for intimating

cancellation)?

May not be required as separate sheet has to be attached for each function. The

latest information shall be treated as final for a period.

(c) How shall the Department differentiate between Original and revised

information about same program.

The latest filed information shall be treated as final.

(vii) While filing original BE-2, how would “Total value of food sold (excluding

VAT)” and “Total value of liquor sold (excluding VAT)” would be disclosed in

advance, when these values can only be known once the program is over.

Estimated value of food and liquor to be sold has to be provided.

Now let us discuss Form BE-1 and BE-2

In Form BE-1 some basic information is asked like - Name, PAN., Address ( principal and additional), TIN ( if having), Phone/Mobile, email, bank details.

In Form BE-2 is actually in 2 parts. Point 1-6 and point-8 are to be mentioned once and details in point 7 to be provided for each programme/function. For example if there are 12 functions in a fortnight then details in point-7 to be provided for all 12 functions. Some important points in BE-2 are:

(a) In point 7(vi) details of number of persons/plate to be provided separately for breakfast, lunch, evening snacks, dinner.

(b) In point 7(ix) particulars of the caterers to be provided- Name, TIN, address

(c) In point 7(x) rate per person/plate to be mentioned. In my view rate to be provided separately for breakfast, lunch, evening snacks and dinner if agreed separately. As number of person booked may be differ for each time.

(d) in point 7 (xi) total value of food (not liquor) sold to be mentioned. In FAQ deptt has clarified that it is on estimated basis.

(e) in point 7 (xii) total value of liquor (not food) sold to be mentioned. In FAQ deptt has clarified that it is on estimated basis.

Hope above details will assist regarding compliance of Notification No.F.3(393)/Policy/VAT/2013/1086-1096 dated 19.12.2013.

Disclaimer: The opinion(s) expressed by author are of his own, and/OR information provided by author, the users need to verify it from their own sources. No responsibility of any sort taken by author for any opinion expressed or the information posted on this blog.