VAT is levied on intra-state sale of goods, while Central Sales Tax (CST) applies to inter-state sale of goods. The application for CST Registration is made in the VAT Registration form. You will receive both registrations simultaneously.
Often known as TIN Number, it is mandatory for any manufacturing or trading business with a turnover of over Rs. 5 lakh.
There are only 3 simple steps:
Data Check
We do a thorough check of the files you send in
Vendor Connect
We will appoint an affiliate to process your application
Receipt of TIN
The TIN will be issued within 15 days of the application
What is VAT Registration?
VAT registration is a mandatory requirement imposed by tax authorities for businesses meeting certain criteria to charge, collect, and remit Value Added Tax (VAT) on their taxable sales. When a business reaches or exceeds the threshold set by the tax authority for VAT registration, it must apply for VAT registration within the stipulated timeframe. The threshold varies by country and is often based on the business’s annual turnover or sales revenue. Once registered, the business is issued a unique VAT registration number, which it must prominently display on invoices and other relevant documents. VAT registration enables businesses to reclaim VAT paid on their purchases (input tax) and charge VAT on their sales (output tax). It also imposes obligations such as timely VAT return filing and compliance with VAT regulations. Failure to register for VAT when required can result in penalties and legal consequences. Overall, VAT registration is a critical step for businesses operating in VAT-registered jurisdictions, ensuring their adherence to tax laws and facilitating the smooth functioning of the VAT system.
6 Essential Facts on VAT Registration
When do you need VAT Registration?
Whether or not you need VAT registration right now depends on the state in which your business is operating. In most states, registration is not required at all until your turnover crosses a certain threshold. This is usually Rs. 5 lakh in annual revenues. It also matters what it is you’re selling, as some items may be exempt. Salt, for example, is exempt from VAT.
I am an online seller. Do I need VAT Registration?
If you are planning to sell via any of the large online marketplaces, such as Amazon, Flipkart or Snapdeal, you will need a VAT Registration no matter what your turnover is. A TIN or Taxpayer Identification Number is mandatory before you get on their platform.
How long will it take for approval?
This depends on two things: your promptness with the documents required and the work load of the government. Do ensure that you have all the documents in order or it will end up being delayed or need a reapplication. Once the documents are submitted, it depends on how soon the inspector visits your premises (yes, you must have a commercial space to be eligible for VAT). If you live in a metropolitan city, the visit is likely to be sooner than if you live in a Tier I or II city.
How do I pay the government the tax I collect and file returns?
VAT is collected at every stage of production, so some of the amount you collect from your customers will be retained by you, while the remainder will be paid to government via designated banks on a monthly basis. Returns must also be filed. The date and frequency differs with every state.
What is the VAT Composition Scheme?
Businesses with a turnover of between Rs. 10 lakh and Rs. 50 lakh can simplify VAT compliance by applying for the VAT Composition Scheme. By joining this scheme, they will pay a lower rate of tax, that is fixed, and file only quarterly, or, for some businesses, annual returns.
Can payment be made and returns filed online?
Yes, all Indian states have websites (although some don’t work very well) that allow payment of the VAT collected and return filing.
What You Need To Know
First Time Only
The default option for start-ups and growing businesses as only private limited companies can raise venture capital.
Same As TIN
The default option for start-ups and growing businesses as only private limited companies can raise venture capital.
Commercial Space Necessary
The default option for start-ups and growing businesses as only private limited companies can raise venture capital.
FAQs on VAT Registration
Yes, it is better if you are in office during the inspection. We will try to inform you about the time of the visit. However, surprise visits are occasionally conducted.
No, it won’t. However, if you have a commercial space attached to your house, so long as it has a separate entrance, it can be treated as a commercial establishment.
Due dates differ from state to state, as VAT is a state subject. Most states require VAT to be filed monthly, and also need an annual return to be filed.
In Mumbai and Pune, the amount is Rs. 30,030. The applicant needs to have two demand drafts for Rs. 25,000 and Rs. 5030 in favour of MVAT. In Delhi and Chennai, no deposit is needed. In Bangalore, Ahmedabad and Kerala, it ranges from Rs. 5000 to Rs. 25,000, depending on the type of the business. In Gurgaon, Noida and Ghaziabad, there is no deposit but you need to furnish a bank guarantee of Rs. 1 lakh.
You can scan and send us the documents. We could even arrange for the documents to be picked up by our representatives.