VAT or Value Added Tax is levied by the government of India on businesses that produce an annual turnover of INR 5 lakhs or more (varies from state to state). Value Added Tax is levied on sales of goods and other commodities, like how income tax is levied on income and service tax is levied on services. VAT is generally 12.5% to 14% across states in India, as levied by the respective state governments and is paid at every stage of the sales procedure.
Follow these steps if you want apply for VAT registration number online:
- Log on to your state’s VAT website and click on the registration tab.
- Add information and attach documents (an indicative list of documents is mentioned below for reference. However, actual documents may vary from state to state).
- You might be allocated a temporary VAT registration number once you pay the application fees.
- Once the verification of your documents is done, you will be allocated your permanent VAT registration number.
- You can also check your VAT status online, if enabled by the relevant State Government.
To apply for a VAT registration number offline, please follow the steps mentioned below:
- Find local VAT office of the State Government in your city.
- Carry along all the necessary documents (an indicative list of documents is mentioned below for reference. However, the actual documents may vary from state to state).
- The local VAT office will inspect your premise and conduct a verification of all your documents.
- Post verification and complete payment of the fees, the VAT number will be allocated within a few days.
- To check the status of your application, you can log on to your state’s VAT website and provide your credentials or the temporary VAT number.
After registration on the website, here’s what will happen next:
- The authorities from the local VAT office will inspect the premises where the business is conducted, within a prescribed time.
- After successful completion of the inspection, you will have to pay a specified fee to the local office for your VAT registration.
- On payment of the fee, a TIN NUMBER will be provided to you for your business and you will also be given the VAT registration certificate.
For VAT registration, here are the list of documents to be kept in hand:
- Incorporation Certificate of Company (in case of Companies).
- Memorandum of Association (MoA) & Articles of Association (AoA) (in case of Companies).
- Particulars of persons involved in the business, i.e. directors (in case of companies), partners (in case of firms) and individual proprietor (in case of proprietorship).
- Address Proof of persons involved in the business – Lease / Rental Agreement.
- PAN Card (Company's PAN card or Individual's PAN card in case of proprietorship).
- ID Proof of persons involved in the business (Pan Card / Election Card/ Passport/ Driving License).
- Rental Agreement/ Lease Agreement for the office premises in the name of Company /Partnership / Proprietorship.
- Partnership Deed (in case of partnership firm)
- Passport size photograph of persons involved in the business, i.e. directors (in case of companies), partners (in case of firms) and individual proprietor (in case of proprietorship).
Apart from the above, you are also expected to keep the following information handy:
- Name of the Dealer / Company
- Postal Address
- Telephone No
- E-Mail Address
- Details of Director/ Managing Director/ Partners / Proprietor (as applicable) – Address, Ph. No., E-Mail ID
- Details of Authorized Signatory
- Date of Commencement of Business
- Date of incorporation (in case of Company)
- Nature of Business
- Description of commodities
- Bank account details
- List of Directors (in case of Companies) / Partners (in case of Partnership Firm)
Fee structure for VAT registration
- VAT registration fee Rs 500
- Professional tax Rs 1000 for the proprietor, Rs 1000 for each partner for partnership, Rs2500 for Private limited / Limited.
- For turnover:-
- From Rs 0 To 2 lakh – Rs 2000/-
- Rs 2 lakh to 10 Lakh – Rs 3000/-
- Rs 10 Lakh to 25 Lakh – Rs 6000/-
- Above 25 lakh – Rs 10000/-
Who will not be covered by VAT?
Small Dealers: Value Added Tax will not cover businesses whose turnover is less than a certain limit. As per White Paper, VAT Act should be so designed that high taxpayers should not be spared from paying more tax, and the small dealers should be free from hassles of compliance procedures.
Dealers with limited turnover would have the option to pay a lump sum amount based on its total turnover at the specified rate as low as 0.25%. For example, in Odisha, a trader having an annual turnover of less than Rs. 2,00,000/- will not be covered under VAT, and the general tax rates will not be applied.
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