Section 12 - Time at Which Turnover, Purchases and Adjustments Arise
Section 12 of the Delhi Value Added Tax Act, 2004 governs when turnover, turnover of purchases, and tax adjustments are recognised in a tax period. It generally follows a dealer's regularly maintained accounting records, subject to statutory conditions, notifications, permissions and prescribed transaction-specific rules.
Section 12: statutory provisions explained
Section 12(1): General accounting basis
Subject to sub-sections (2), (3) and (4), turnover and turnover of purchases arising during a tax period are determined from the amounts recorded in the dealer's accounts, provided those accounts are regularly and systematically prepared and maintained, present a true and fair view of the dealer's dealings, and are used to determine business turnover for commercial or income-tax purposes.
Section 12(2): Notification of cash or accrual basis
The Commissioner may, by notification:
(a) permit specified classes of dealers to record turnover on the basis of amounts paid or received; and
(b) require specified classes of dealers to record turnover on the basis of amounts payable or receivable.
Section 12(3): Changing the accounting method
A dealer wishing to change the method of determining turnover or turnover of purchases may do so only with the Commissioner's consent, subject to any terms and conditions imposed by the Commissioner.
Section 12(4): Prescribed timing for specific transactions
The Government may prescribe when a dealer must treat (a) turnover, (b) turnover of purchases, and (c) an adjustment of tax or adjustment to a tax credit as arising for a class of transactions.
Meaning of key terms
Turnover: The value of sales determined under the definitions and valuation provisions of the DVAT Act, particularly section 2 and section 5, as applicable.
Turnover of purchases: The relevant purchase amounts attributable to a dealer for a tax period, determined under the Act and the applicable accounting basis.
Tax adjustment: A change to tax payable under section 8 or to input tax credit under section 10, attributed to the period determined by the relevant provisions and prescribed rules.
Rule 4 of the Delhi VAT Rules
Section 12 should be read with Rule 4 of the Delhi Value Added Tax Rules, 2005, which addresses the timing of turnover and purchases for specified transactions. The statutory accounting rule is subject to any applicable prescribed timing rules and departmental notifications. Dealers should check the rule as amended for the relevant period rather than assume every invoice, payment or delivery is recognised on the same date.
Practical compliance points
- Maintain consistent and systematic accounts that give a true and fair view of transactions.
- Check whether a notification requires or permits cash-basis or accrual-basis accounting for the dealer's class.
- Obtain the Commissioner's consent before changing the method used to determine turnover and turnover of purchases.
- Match credit notes, debit notes, sales returns and input-credit changes with the periods prescribed by the relevant provisions.
- Retain invoices, books, payment records and any permissions supporting the tax-period treatment.
Legislation and official resources
Delhi Department of Trade and Taxes - official portal (Acts, Rules, amendments and notifications).
Delhi Value Added Tax Act, 2004 - departmental consolidated text (2014); check subsequent amendments.
Delhi VAT Rules and Forms - Rule 4 (check later amendments and applicable notifications).
Reviewed 6 October 2026. This is an explanatory guide; the legislation and amendments applicable to the transaction period govern.