Section 40 of The Delhi Sales Tax Act, 1975
If any dealer to whom the provisions of sub-section (2) of section 21 apply--
- (a)sells or otherwise disposes of his business or any part of his business or any place of business, or effects or comes to know of any other change in the ownership of the business; or
- (b)discontinues his business or changes his place of business or warehouse, or opens a new place of business; or
- (c)changes the name or nature of his business, or effects any change in the goods or class of goods in which he carries on his business and which is or are specified in his certificate of registration; or
- (d)enters into partnership or other association in regard to his business, he shall, within the prescribed time, inform the prescribed authority accordingly, and if any such dealer dies, his legal representative shall in like manner inform the said authority.
Summary
- If a dealer who is required to file tax returns under Section 21(2) makes major changes to their business, they must report these changes to the tax department.
- Reportable changes include selling, disposing of, or transferring the ownership of the business, any part of the business, or any place of business.
- A dealer must also report if they shut down the business, change their business address, change their warehouse location, or open any new place of business.
- Any change in the business name, the nature of the business, or the classes of goods traded (which are written on their registration certificate) must be reported.
- Entering into a partnership or forming any other business association in connection with the business must be reported.
- All such reports must be submitted to the prescribed authority within the time limit set by the rules, and if the dealer dies, their legal representative must report the change in the same way.
Practical examples
FAQ
1. Who is required to report business changes under Section 40 of this Act?
Any dealer who is required to file tax returns under Section 21(2), which includes all registered dealers and any unregistered dealers who have been served a notice to file returns.
2. What kinds of changes to business locations must be reported to the tax authority?
A dealer must report changing their place of business, changing their warehouse, or opening any new place of business.
3. If a business owner dies, who is responsible for reporting the death or change in business status to the tax department?
If the dealer dies, their legal representative is legally required to inform the prescribed authority about the change in the business.
4. Do I need to report a change in the type of products I sell?
Yes, if you make any change in the goods or class of goods in which you carry on business, and those goods are specified in your registration certificate, you must report it.
Test yourself
Q1.Under Section 40 of The Delhi Sales Tax Act, 1975, which of the following events triggers a mandatory obligation for a dealer to inform the prescribed authority?
Q2.Under Section 40 of The Delhi Sales Tax Act, 1975, to which specific group of dealers does the requirement to report business changes apply?
Q3.Under Section 40 of The Delhi Sales Tax Act, 1975, if a registered dealer who is required to report business changes dies, who is legally responsible for notifying the tax authority?
Q4.Under Section 40 of The Delhi Sales Tax Act, 1975, which change regarding a partnership triggers the requirement to inform the prescribed authority?