Delhi VAT Act, 2004 / Section 14

Section 14 of Delhi Value Added Tax Act, 2004 - Treatment of Opening Stock During Transition

Section 14 of the Delhi Value Added Tax Act, 2004 governs transitional input tax credit for qualifying stock held when Delhi moved from the Delhi Sales Tax Act, 1975 to the VAT system. It explains the opening-stock declaration, conditions for credit, exclusions and certification requirements. The provision concerns the 2005 transition, not a new credit available on present-day stock.

Historical transition: The Delhi VAT Act commenced on 1 April 2005. The four-month declaration period in Section 14 was linked to that commencement, and should not be read as a fresh rolling deadline. The subsequent transition to GST on 1 July 2017 is governed by separate GST transitional provisions. Delhi VAT remains relevant to historical assessments and supplies that continue to fall within the surviving VAT regime.

Meaning of opening stock and transitional credit

Opening stock for Section 14 means trading stock, raw materials and packaging materials for trading stock meeting the statutory conditions. Transitional tax credit means credit under the VAT framework for qualifying Delhi Sales Tax already borne by that stock before the VAT commencement. Section 14 should be read with Section 9 (tax credit), the applicable Delhi VAT Rules and contemporaneous notifications.

Section 14(1) - Opening-stock statement and deadline

A registered dealer wishing to claim the credit had to furnish a prescribed statement to the Commissioner within four months of commencement of the Act. The statement had to identify trading stock, raw materials and packaging materials for trading stock that satisfied both requirements:

The stock was held in Delhi on the commencement date (1 April 2005).
The stock had been purchased after 1 April 2004, as expressed in the statutory provision.

The related procedural provisions are Rules 8 and 30 and the prescribed opening-stock declaration, commonly referenced as Form DVAT-18. Dealers should consult the rule and form applicable to the historical filing period.

Section 14(2) - Conditions for tax credit

Credit was conditional upon all of the following:

The dealer furnished the opening-stock statement under Section 14(1).
The stock had borne tax under the Delhi Sales Tax Act, 1975 at the point specified by the Government under Section 5 of that Act.
The stock had been purchased from a registered dealer for a purpose described in Section 9(1) of the DVAT Act.

Where the requirements were met, the tax borne under the earlier law could be credited under Section 9, only to the extent and in the manner prescribed, and subject to prescribed restrictions.

Mandatory invoices and single claim

The first proviso requires the claimant to possess invoices issued by a dealer registered under the Delhi Sales Tax Act, 1975 for the relevant purchases. The second proviso requires the entire eligible credit to be claimed in a single statement accompanying a return under the DVAT Act. These requirements should not be confused with the ordinary ongoing input-tax-credit procedure for later purchases.

Section 14(3) - Stock not eligible for transitional credit

Section 14 expressly excludes credit for:

Finished goods manufactured out of tax-paid raw materials, and capital goods.
Goods taxable at the last point under the Delhi Sales Tax Act, 1975 that were held on commencement.
A statement furnished more than four months after the DVAT Act commenced.
Opening stock held outside Delhi.

These are specific statutory exclusions even if a dealer otherwise possessed purchase invoices.

Section 14(4) - Accountant certificate above Rs. 1 lakh

A dealer wishing to claim more than Rs. 1,00,000 in opening-stock tax credit had to submit, along with the statement, a certificate signed by an accountant in the prescribed form. The certificate was to confirm that the net credit claim was true and correct. The statutory threshold concerns the credit claimed, not the market value of the stock.

Documents and verification for historical claims

Reconcile the opening-stock inventory with books as of 1 April 2005, including location and quantities.
Retain qualifying purchase invoices issued by dealers registered under the earlier Delhi Sales Tax law.
Check that purchases and the point of taxation meet Section 14(2), and exclude stock barred by Section 14(3).
Verify the prescribed calculation, the single claim statement, return acknowledgement and any required accountant certificate.
Review Rules 8 and 30, Form DVAT-18 and amendments or instructions effective for the original claim period.

Difference from GST transitional stock credit

Section 14 addresses the Delhi Sales Tax-to-DVAT transition in 2005. The 2017 move to GST involved separate transitional-credit provisions, including Section 140 of the Central Goods and Services Tax Act, 2017 and the corresponding Delhi GST framework, subject to amendments, judicial decisions and eligibility. A dealer cannot use the expired Section 14 opening-stock mechanism to claim new GST-era credits.

Official law and related resources

Reviewed 6 October 2026. The linked 2014 departmental compilations are historical versions; check amendments and notifications applicable to the transaction or claim date. This is a general legal explanation, not an extension of any expired statutory filing period.