Registration of vat

WHO HAS TO BE REGISTERED FOR VAT?

Any dealer conducting a business or intending to conduct a business may apply to be registered for VAT. However all persons conducting a business must register for VAT from the date they commence business if they believe their taxable turnover will exceed a threshold of Rs.40 lakhs in 12 consecutive calendar months.

All dealers must register for VAT if their taxable turnover exceeds Rs.10 lakhs for the preceding three consecutive calendar months.

Regardless of their taxable turnover the following dealers must register for VAT at the commencement of their business:

Every dealer importing goods in the course of business from outside the territory of India;

Every person residing outside the State but carrying on business within the State;

Every dealer registered or liable to be registered under the Central Sales Tax Act 1956, or any dealer making purchases or sales in the course of inter-state trade or commerce or dispatches any goods to a place outside the State otherwise than by way of sale;

Every dealer liable to pay tax at Special rates specified in Schedule VI of the AP VAT Act 2005;

Every commission agent, broker, del credere agent, auctioneer or any other mercantile agent by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of his non-resident principal;

Every person availing an industrial incentive in the form of a tax holiday or tax deferment;

Every dealer executing any works contract exceeding Rs 5 lakhs for the State Govt. or a local authority and any dealer executing works contracts and opting to pay tax by way of composition.

CAN I APPLY FOR VOLUNTARY REGISTRATION?

Yes. However, your activities must constitute a business for VAT purposes and you will be required to meet the conditions laid down in the AP VAT Act 2005.

 

WHEN DO I BECOME LIABLE TO REGISTER FOR VAT?

If you are in business in the categories listed in the Answer to the Question 1 above, you must register prior to the commencement of your business. For other businesses, if you are commencing a business and expect your taxable turnover to exceed, in 12 consecutive calendar months Rs.40 lakhs you must register for VAT at the commencement of the business.

 

If you intend to make inter-state purchases or sales or intend to dispatch goods outside the State other than by way of sale, then you must apply for VAT registration before applying for CST registration.

 

Other dealers have to consider their taxable turnover for the preceding 3 months and preceding 12 months. If during the past 3 months their taxable turnover exceeded Rs.10 lakhs, or exceeded Rs. 40 lakhs in the past 12 months, they must apply for VAT registration by the 15th of the following month.

Illustration: If your taxable sales exceeded Rs.10 lakhs during the preceding 3 months ending August 2005 say on 25.08.2005, your liability to be registered as VAT dealer arises at the end of August 2005.

The time to apply for VAT registration in this case is on or before 15.09.2005. You will be registered with effect from 01.10.2005.This is the date from which you are liable to charge and pay VAT. For the earlier period i.e., before 1.10.2005, you are liable for TOT.

HOW DO I CALCULATE MY TAXABLE TURNOVER?

Your taxable turnover is calculated on an ongoing basis. You should calculate at the end of each month the total value of taxable goods sold for the preceding three months. Where the total exceeds Rs.10 lakhs you are required to apply for VAT registration. You should also see whether your taxable turnover for the preceding twelve months exceeds Rs.40 lakhs. If it exceeds Rs.40 lakhs you are required to apply for VAT registration.

WHAT FACTORS DO I HAVE TO CONSIDER IN DECIDING WHETHER TO APPLY FOR VOLUNTARY VAT REGISTRATION?

In considering whether you should register voluntarily for VAT, you should ask yourself these questions:

a. Do I make taxable sales to other VAT dealers ?

If you are not registered for VAT you cannot issue tax invoices on which your customer VAT dealer can claim credit for the tax. Your customer will therefore have to charge a higher price for his sales if he cannot claim a credit for the VAT. In this case he might choose to trade with another VAT dealer and you would lose business.

b. Do I trade, principally with non-VAT dealers/consumers ?

In this case it is likely to be in your interest not to register for VAT.

c. What are the obligations of VAT registration ?

Once registered, you will have to account for output tax that is attributable to your taxable sales. You will also have to submit VAT returns monthly to the Commercial Taxes Department and keep proper books of accounts.

If you decide to register voluntarily, the Law requires that you must remain registered for VAT for a period of 24 months regardless of your taxable turnover.

d. Is  input tax credit likely to exceed the tax on the sales I make?

In this case you will benefit from VAT registration.

 

IF I WANT TO REGISTER VOLUNTARILY, CAN THE COMMERCIAL TAXES DEPARTMENT REFUSE TO REGISTER ME?

Voluntary registration can be refused for one or more of the following reasons when an applicant:

Has no taxable sales;

Has no fixed place of business;

Does not keep proper accounting records;

Has not provided details of a bank account with any bank;

Has arrears outstanding under APGST Act 1957 or CST Act 1956 or AP VAT Act 2005;

Is not able to establish his identity.

Where the Commercial Taxes Department refuses an application for voluntary registration, the applicant has the right to raise an objection and to pursue the issue to a formal appeal.

WHEN I REGISTER FOR VAT CAN I CLAIM A CREDIT FOR VAT I HAVE PAID ON MY GOODS IN STOCK AT THE TIME OF REGISTRATION ?

Yes. However to obtain this credit you must comply with the following conditions:

The goods, including capital goods must be on hand on the date of effective registration notified on your VAT Certificate of Registration.

The goods must have been purchased within the three months preceding the date of effective registration.

The goods must have been purchased from a VAT dealer and you must have an invoice (not a tax invoice) from a VAT dealer with his TIN on the invoice.

You must take inventory within 7 days of the date of effective registration.

YOU CANNOT CLAIM A CREDIT FOR TOT OR CST INCURRED BEFORE VAT REGISTRATION.

HOW DO I REGISTER FOR VAT?

1 Click here to Download VAT 100

2 Fill up Form VAT 100: Important Guidelines

a Sl. No. 1 to 5: Self explanatory

b Sl. No. 6: Indicate major business activities – not exceeding 5

c Sl.No.7: Indicate major commodities to be traded – not exceeding 5

d Sl. No. 8 and 9: Self explanatory

e Sl. No. 10: Use Form VAT 100A for giving address of additional place of business if needed

f Sl. No.11: Use Form VAT 100B for giving details of owners, Partners, Directors if needed

g Sl. No. 12 to 13: Self explanatory

h Sl. No. 14: Indicate likely date of first sale transaction

i Sl. No. 15 to 23: Self explanatory

j Sl. No. 24: Indicate here any other information which is not covered up to Sl. No. 23.

3 Click here to download VAT Form 100A if needed

a. Sl. No. 1 to 3: Self explanatory

4 Click here to download VAT Form 100B if needed

a. Sl. No. 1 to 9 : Self Explanatory

5 Paste Photo at assigned places

6 Sign the applications

7 Enclose following Documents

HOW DO I REGISTER FOR CST?

For getting registered under CST ACT prior registration under VAT is mandatory. The dealers who are registered under VAT can apply for CST registration in form CST A (“Application for CST registration”),

WHEN DO I START TO CHARGE VAT?

You should start keeping VAT records and charging VAT to your customers from the date notified to you by the Commercial Taxes Department. This will be the date shown as the effective date of your registration on your Certificate of Registration. You will have to account for VAT from that date.

Procedure for VAT Registration

Posted 15 March 2009 – 11:00pm by admin

ADMIN BusinessgyanVAT registration is required for any business that is into sales either by way of trading, manufacturing etc.  The units may to Proprietary, Partnership, Private Limited as the case.

 

The documents that are required to submit for company a are as below:

Proprietary company:

1.   Application in VAT (Form 1).

2.   Additional for CST registration (Form A).

3.   Professional tax registration (Form 2).

4.   Copy of the rental agreement of the business place.

5.   Copy of the address proof, ID proof of the Proprietor / Partner / Director.

6.   Four PP size photographs of Proprietor / Partner / Director.

7.   PAN No. & Bank Account No.

8.   Details of business activities.

Additional Documents for Partnership:

1.  Partnership deed

Additional document for Private Limited:

1.  Memorandum of Association and Articles of Association.

Procedure:

1.  The application alongwith the documents to be submitted to the functional local VAT office.

2.  Local VAT Office shall conduct an inspection of the premises within three days after submitting the application, after inspection the relevant deposit fee to be paid.

3.  On payment of the Professional fee deposit the TIN No. will be allotted and Certificate will be issued within a day.

Fee structure:

1.   VAT registration fee Rs.500

2. Professional tax Rs.1000 for Proprietor, Rs.1000 for each Partners for Partnership, Rs.2500 for Private Limited / Limited.

3.   For turnover of Rs.0 to Rs.2.00lakhs – Rs.2000/-

Rs. 2.00 lakhs to Rs.10.00 lakhs – Rs.3000/-

Rs.10.00 lakhs to Rs.25.00 lakhs – Rs.6000/-

Above Rs.25.00 lakhs – Rs.10000/-