Section 86(23) of the Delhi VAT Act: Penalty for Exhibition-Cum-Sale Organisers
Section 86(23) of the Delhi Value Added Tax Act, 2004 addresses a person organising an exhibition-cum-sale in Delhi who fails to meet specified information, registration, tax-payment or inspection obligations. The penalty described in the provision is Rs. 50,000 or an amount equal to the tax payable on the relevant goods if sold in Delhi, whichever is greater.
Who is covered by Section 86(23)?
The provision refers to any person who organises an exhibition-cum-sale in Delhi, whether as principal, agent or in any other capacity. The description therefore focuses on the organising role, not merely the title given to the organiser in an agreement.
An exhibition-cum-sale is an event at which goods are displayed and offered or sold by participating traders. The applicability of DVAT to a particular event depends on the nature of the goods, the transactions and the relevant statutory period.
Four types of default under Section 86(23)
- Failure to furnish information: not supplying required information about goods brought to the exhibition, kept in stock or sold by a participant, whether before, during or after the event.
- Failure concerning participant registration and tax: not ensuring that the participating dealers obtain the registration required under the Act and pay the tax due.
- Obstruction of inspection relating to participants: not permitting inspection of business premises, goods, accounts or records of participating traders.
- Obstruction of inspection of organiser records: not permitting inspection of the organiser's accounts and records relating to the exhibition-cum-sale.
These categories correspond to clauses (a) to (d) described in the source provision. Whether a participant was required to register or pay DVAT must be determined under the applicable law; the duty is not a statement that every exhibitor must obtain a DVAT registration irrespective of its circumstances.
Amount of penalty under Section 86(23)
| Element | Rule explained |
|---|---|
| Base penalty | Rs. 50,000. |
| Tax-based amount | An amount equal to the tax payable on the relevant goods if they were sold in Delhi. |
| Penalty under the stated formula | The higher of the two amounts. |
| Fixed maximum | No fixed rupee ceiling is specified by this formula when the tax-based amount exceeds Rs. 50,000. |
Illustrative calculations
| Illustrative tax on relevant goods | Penalty under the stated formula |
|---|---|
| Rs. 18,000 | Rs. 50,000 |
| Rs. 50,000 | Rs. 50,000 |
| Rs. 1,20,000 | Rs. 1,20,000 |
The examples illustrate the mathematical formula only; the goods and tax amount legally relevant to a particular contravention, and whether a penalty is warranted, require case-specific assessment.
Practical compliance checklist for organisers
- Maintain a current list of exhibitors and relevant business and registration particulars.
- Record goods brought in, goods held in stock and sales information as required for the event.
- Verify which participating traders are subject to the relevant registration and tax requirements.
- Retain contracts, stall-allotment records, stock statements, invoices and related correspondence for the prescribed period.
- Make the organiser's and participants' relevant premises, goods and records available for lawful inspection.
- Respond promptly to statutory notices or information requests and preserve proof of submission.
Related DVAT provisions
Section 86 sets out penalties for specified defaults. Other provisions may be relevant depending on the facts, including Section 61 on transport and movement of goods, Section 59 on information and inspection-related powers, and registration provisions of the Act. Sections 86(21) and 86(22) address particular defaults by casual traders and are distinct from the organiser-focused Section 86(23).
Position under GST
For exhibitions and supplies governed by GST, the Central Goods and Services Tax Act, 2017, the Delhi GST Act, 2017 and their rules govern registration, invoices, returns and applicable enforcement provisions. GST treatment of occasional or temporary selling activities should be assessed under the GST definition and registration rules, rather than automatically applying historical DVAT penalty amounts.
Official legal references
- Delhi Value Added Tax Act, 2004 - departmental consolidated text (historical reference; review Section 86(23) and subsequent amendments).
- Delhi VAT Act - India Code text.
- Department of Trade and Taxes, Government of NCT of Delhi - legislation, notifications and guidance.
- Delhi GST Act - official departmental resources.
- GST Portal - GST compliance resources.