VAT REGISTRATION
MEANING:
Value Added Tax (VAT) is a tax collected on the sale of your goods or services and relinquished on the purchasing of the goods or services that will be used in your business.
FOLLOWING ARE THE MAIN FEATURES OF VAT:
ü VAT is imposed on goods at import stage, manufacturing, wholesale and retails levels;
ü A uniform VAT rate of 5%-12% percent is applicable for both goods ;
ü VAT is payable at the time of supply of goods and issuance of invoice;
ü Tax returns are to be submitted on monthly or quarterly or half yearly basis as notified by the Government.
FOLLOWING STEPS ARE REQUIRED TO BE PERFORMED FOR VAT REGISTRATION:
- The application and documents is to be submitted to the local VAT office.
- Local VAT Office shall inspect the premises within 3 days after submitting the application.
- On payment of the Professional fee, TIN No. will be allotted and Certificate will be issued within a day.
DOCUMENTS REQUIRED FOR REGISTRATION OF VAT:
- Copy of rental agreement of business place.
- Copy of the address proof, ID proof of the Proprietor / Partner / Director.
- 4 passport size photographs of Proprietor / Partner / Director.
- PAN No. & Bank Account No.
- Details of business activities.
- Surety to the extent of Rs 1,00,000
TIME FRAME TO REGISTER VAT:
- The average time to process applications is 4-5days.
RATES OF VAT:
- The standard rate of VAT is 12.5%. There are reduced rates of 4% and 1%.
- The minimum annual turnover for V.A.T. registration is INR 10 Lacs .but vat provision become immediate applicable as soon as business enter into any central purchase.
- V.A.T. returns are filed on a monthly or quarterly basis.
ADVANTAGES OF VAT REGISTRATION:
- After VAT registration you get your TIN No.
- Tax invoices can be issued to other parties, as without TIN No. it is not possible.
- Get the benefit of input tax credit i.e. the difference between purchase tax and output tax, which will be set-off against the net tax payable if your sales tax arises in transaction.
- The tax status of your business can be seen on vat websites by just putting your TIN number wherein you get all the details.
- Taxability of a registered dealer is lower than an unregistered dealer.
- Increases credibility as some businesses prefer dealing with suppliers that are VAT-registered.
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