VAT is the tax levied by the Central Government of India on the value added to a product or services before reaching to the final consumer. Value Added Tax Registration is mandatory and important for all traders or business those who are actively involved in manufacturing or even production of goods and services. VAT is similar to sales tax, but it’s quite different from sales tax considering that it is collected once at the time of purchasing. These days, online VAT registration is picking the pace up among all those business entrepreneurs all over the country since it’s simplified and flexible in comparison to traditional methods. VAT is charged on the value addition to a product and for that, a final customer has to pay as per the rules and regulations. All business organizations and manufacturing houses need to be registered as per the VAT registration act of the country to VAT annually. The VAT registration is an easy process and can be done in less or little time.
Value Added Tax Registration Features
There are significant advantages VAT registration for your company.
- There will be an individual authenticity associated with your business as well as other entrepreneurs through will be more comforted in doing business with you. This is a surety on your part that yes legally you are a sorted company.
- You can use ‘Set – off’ which the difference of the VAT is given to your supplier and the VAT you receive from your customer. So in other words, VAT for a particular product has to reach the Government only once. So if you have paid some VAT already, you can deduct it from what your customer gave you.
- A VAT registration is required when your business turnover is more than 5 lakh INR. So it gives your company appears well established and larger. The VAT registration helps appeal to more entrepreneurs and, in turn, help you expand.
- You can easily see your VAT status or dealer status just by punching in your VAT number. Hence no hassles in going through all documents or receipts that when last VAT was paid.
- You become eligible for VAT refunds meaning that you can claim the taxes you have paid in a European country if you have purchased any goods there.
VAT Registration Process
The necessary steps for VAT registration, but minor variations are there based on the state or city your business is located in.
- The application along with the documents required to be submitted to the local VAT office.
- Local VAT Office shall conduct an inspection of the premises within three days after filing the application, after examination the relevant deposit fee to be paid.
- On payment of the Professional fee deposit, the TIN Number will be allotted, and Certificate will be issued within a day.
Online VAT Registration Procedure – VAT e-Registration
- Log on to your state VAT website and click on the registration tab.
- Add information and attach documents as the request for your company.
- You may be allocated a temporary VAT registration number.
- Once the verification is done, you will be assigned your Permanent VAT registration number.
- You can check your VAT status online.
VAT Registration Fees
Here is the simplistic idea of the VAT registration limit and the costs required for the same.
- VAT registration fee Rs. 500/-.
- Professional tax Rs.1000/- for Proprietor, Rs.1000/- for each Partner for Partnership, Rs.2500/- for Private Limited or Limited.
- For turnover of Rs.0 to Rs.2.00lakhs – Rs.2000/-.
- Rs. 2 lakhs to Rs.10 lakhs – Rs.3000/-.
- Rs. 10 lakhs to Rs.25 lakhs – Rs.6000/-.
- Above Rs.25 lakhs – Rs.10000/-.
Documents For VAT Registration
These are the primary documents that will require of you to submit with your company’s VAT registration:
- Incorporation Certificate of Company (in the case of Companies).
- MoA & AoA (in the case of Companies).
- Particulars of people involved in the firm.
- Address Proof of Director – Lease or Rental Agreement.
- Company PAN Card / Individual PAN card in case of Proprietorship.
- ID Proof of Director – Pan Card or Election Card or Passport/ Driving License.
- Lease Agreement or Lease Agreement of Company or Proprietorship.
- In the case of Partnership firm- Partnership Deed.
- Passport size Photograph of Director of the enterprise.
Assessee needs to provide following details as shown below.
- Name of the Dealer.
- Name of the company.
- Postal Address.
- Telephone Number.
- Email Address.
- Details of Director or Managing Director or Partners / Proprietor – Address, Phone Number, Email ID.
- Details of Authorized Signatory.
- PAN No of Partnership firm.
- Date of Commencement of Business.
- Date of Birth(DOB) / Date of Incorporation – (in the case of Company).
- Nature of Business.
- Commodities description.
- Bank Account details.
- List of Directors (in the case of Companies).
- Particulars of the Company / Individual – in the case of Proprietorship.
Check VAT Registration Status
- Visit VAT registration website.
- Enter in your credentials or VAT number.
- The VAT status and dealer status will hence be given to you(Assessee).