The notification, which was to become effective from June 1 prescribed to make it mandatory for traders to provide prior information about all goods being sent outside the national capital.
"On receiving feedback from stakeholders(traders), it has now been decided not to implement the notification," a senior official from the Trade and Taxes Department said.
Yesterday, Chief Minister Arvind Kejriwal had assured a delegation of traders that the AAP government will withdraw the department's notification.
The official said the decision to introduce DS-1 form had been taken to plug tax evasion.
However, the AAP government is planning to reintroduce the DS-1 form in a revised format, saying that it is important for tax collection in the national capital.
"We are withdrawing DS-1 for now. After incorporating suggestions in the revised format, we will reintroduce it in future," Sisodia said.