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?

Value-added Tax (VAT) Registration, also erroneously known as TIN and CST Registration, is mandatory for any business entity engaged in the sale of goods in India and a turnover of over Rs. 5 lakh (although it may be higher in some states). It is a multi-stage state tax that accumulates at various stages of production and supply. At every stage, the purchaser pays the tax and is allowed to offset the same on subsequent sale.

Consumers, therefore, ultimately bear this tax. VAT is collected by the state government and it is essential to know what the VAT rate is for the type of good or service you provide in each state you provide it in. Returns need to be filed on the 20th of each month (partnerships, LLPs and proprietorships can do so quarterly).

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

Do I need to be in office during the inspection?

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.

Will a residential office be sufficient?

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.

When are VAT filings to be done?

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.

What is the deposit amount? How do I deposit it?

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.

How do I send in the documents?

You can scan and send us the documents. We could even arrange for the documents to be picked up by our representatives.

What is Central Sales Tax?

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.