In exercise of the powers conferred by section 164 of the Delhi Goods and Services Tax Act

## Report on Delhi Goods and Services Tax Seventh Amendment Rules, 2020 **1. Executive Summary:** This report analyzes the Delhi Goods and Services Tax Seventh Amendment Rules, 2020, as published in the Gazette of Delhi on July 7, 2021. The amendment, effective from April 1, 2020, modifies Rule 7 of the Delhi Goods and Services Tax Rules, 2017, by substituting a new table specifying tax rates for different categories of registered persons opting for the composition levy scheme under Section 10 of the Delhi Goods and Services Tax Act, 2017. The key change involves a revised rate structure based on the type of supplier. **2. Introduction:** This report provides an overview of the Delhi Goods and Services Tax Seventh Amendment Rules, 2020, based on the official notification published in the Delhi Gazette. The report aims to inform stakeholders about the changes introduced by this amendment to the Delhi Goods and Services Tax Rules, 2017. **3. Policy Overview:** * This document is an **amendment** to the Delhi Goods and Services Tax Rules, 2017. * **Core Objective:** The amendment seeks to modify the tax rates for registered persons opting for the composition levy scheme under the Delhi Goods and Services Tax Act, 2017. **4. Background and Rationale:** The amendment likely aims to refine the existing composition scheme to better align tax rates with the specific nature of businesses and supplies. The table substitution suggests a restructuring of rate categories, potentially to address perceived imbalances or inequities in the original scheme. **5. Key Provisions / Changes:** This amendment specifically changes the rates applied to different registered persons. * **Specific Part Changed:** Rule 7 of the Delhi Goods and Services Tax Rules, 2017, specifically the "Table" within that rule. * **New Rule/Provision:** The entire table within Rule 7 is substituted with a new table. The new table categorizes registered persons based on the sub-sections of Section 10 of the Act under which they are opting for the composition levy, and their type of supply, and prescribes corresponding tax rates. Specifically: * Manufacturers (other than those notified by the government) pay 0.5% of turnover in the State or Union Territory. * Suppliers making supplies referred to in clause b of paragraph 6 of Schedule II pay 2.5% of turnover. * Other suppliers eligible for composition levy under subsections 1 and 2 of Section 10 pay 0.5% of turnover of taxable supplies. * Registered persons not eligible under subsections 1 and 2, but eligible to opt under subsection 2A of Section 10, pay 3% of turnover. * **Difference/Effect of Change:** The amendment introduces a differentiated rate structure. The change specifies categories based on eligibility and activity and corresponding new rates (0.5%, 2.5%, and 3%). The effect is likely to provide more granular tax obligations based on the registered persons' category. **6. Target Audience and Stakeholders:** The direct target audience and stakeholders are registered persons in the National Capital Territory of Delhi who are eligible for or have opted for the composition levy scheme under Section 10 of the Delhi Goods and Services Tax Act, 2017. This includes: * Manufacturers * Suppliers making specific supplies as referred to in clause b of paragraph 6 of Schedule II * Any other supplier eligible for composition levy * Registered persons not eligible under subsections 1 and 2, but eligible to opt under subsection 2A of Section 10 **7. Implementation Aspects (Inferred):** * **Responsible Agency/Bodies:** The Lieutenant Governor of the National Capital Territory of Delhi, on the recommendations of the Council, is responsible for implementing these rules. The Finance Department of the Government of Delhi is also involved, as indicated by the notification's origin. * **Timelines or Procedures:** The amendment is effective from April 1, 2020. The notification serves as the formal communication of these changes. No specific procedures are outlined in the provided text, but registered persons would need to comply with the revised rates from the effective date. **8. Expected Outcomes / Impact of Changes:** The intended outcome of these changes is a more refined application of the composition levy scheme. The revised rates based on business activity could lead to: * Increased tax compliance due to potentially fairer tax burdens for different business categories. * Adjustments to pricing strategies and business operations by affected registered persons to account for the changed rates. **9. Conclusion:** The Delhi Goods and Services Tax Seventh Amendment Rules, 2020, represents a significant adjustment to the tax rates within the composition levy scheme for registered persons in Delhi. By restructuring the rates based on business type and eligibility, the amendment seeks to optimize the tax collection process and potentially promote greater compliance. The new provisions must be considered by relevant stakeholders to ensure compliance and adapt business operations accordingly.

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