Value Added Tax (VAT) Registration*

It is applicable to business engaged in buying and selling of goods. It is a state law, which varies across India. Generally, Registration is mandatory when Business turnover crosses Rs.5 Lakhs in a financial year.
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Value Added Tax (VAT) Registration for your business
India Kickstart packages start at Rs. 7,000/- (excludes Govt. fees at actuals)

Package is inclusive of

  • Advisory on VAT Registration Criteria and conditions
    We will advise on VAT rules & conditions, based on nature of your business
  • Documentation and Application Preparation
    Review entire documentation and preparing VAT & CST Application and submission to Govt.
  • Obtaining VAT TIN Registration Number
    Finally, 11 Digit VAT/CST TIN registration number gets allotted within 20 days

* Available across Maharashtra, Gujarat, Karnataka, Lucknow, Rajasthan and other selected cities at this stage.

What is VAT Registration ?

Value Added Tax is also popularly known as TIN Registration amongst new business. As name indicates, VAT is the Sales tax applicable on purchase and sell of Goods. It is Indirect Tax levied by State Govt. and applicable to dealers engaged in Buying and Selling of Goods/Commodities. As VAT is a State law, it varies state to state towards turnover criteria, Rates applicable, return and compliance conditions etc.VAT Registration is mandatory for all business entities who are selling goods in India and where Turnover crosses Rs.5 Lacs (in some states higher turnover limit of Rs.10 Lacs). Dealer should obtain registration in the state from where principle place of business is located. VAT is a multi-stage tax applicable and at every stage, purchaser pays the tax to the seller and subsequently same is allowed to be setoff against subsequent sale by the dealer.
So, when dealer is having place of business in Maharashtra, they are required to get it registered under MVAT. Now, if dealer sells goods within Maharashtra, then MVAT Rate to be charged on all sell of goods. If the same dealer has sold goods outside Maharashtra (say any state like Gujarat or Delhi), then on such sales effected outside Maharashtra, dealer should levy Central Sales Tax (CST), which a Central Govt. Tax levy.
Rate of VAT/CST depends upon the nature of goods being sold, as every state has prescribed commodity-wise Rates applicable in the range of 1% to 13.5% in general, with certain exceptions as Tax-free goods etc. Hence, it is essential to know the VAT Rate applicable on type of goods being sold by your business. Rate schedule of dealer from selling state is to be followed for effecting Taxable Valid sales.
On Registration, dealer is allotted with 11 Digit TIN Number, which is same as VAT or Sales Tax Registration Number of the business entity with applicable effective start date of registration. This will remain in force until the business is discontinued or TIN no. is cancelled for defaults.
From Compliance perspective, VAT Tax is to be paid to govt. account via online mode (E-payment only) and VAT Returns needs to be filed by 21st of following quarter / month by the Registered Dealers. Individuals, Sole Proprietorship, Partnership and LLP are required to pay VAT on quarterly basis, while other class of businesses is required to pay on Monthly basis, based on their annual liabilities.
In case of Dealers, where annual Turnover for the financial year exceeds Rs.100 Lacs, Mandatory VAT Audit is required to be done by a Chartered Accountant as prescribed compliance under Vat Rules.
Further, Every registered dealer must issue “Tax Invoice” specifying registration number, Value/Prices of goods sold and separate VAT Rate and amount on every invoices.

Important Conditions of VAT

All Small Dealers who have sold goods for a value less than Rs.5 Lacs (Rs.10 Lacs in specific states) in a financial year are fully exempted from VAT Registration. However, at the same time, they are also not allowed to set-off VAT tax paid on purchases before they obtain registration.

The service provider must obtain VAT Registration, if the turnover during financial year crosses Rs. 5 lakh. However, in some states turnover limits for registration is enhanced to Rs.10 Lacs. Only after registration, dealer can start collecting VAT on all sales effected by them.

Business entities also have option to obtain Voluntary Registration without waiting for Turnover limits to be breached. Under Voluntary Registration, in some states Govt. charges Refundable Deposits in above Rs.25,000 refundable. However, dealer opting for Voluntary registration must obtain Introduction from the existing VAT Registered dealer with over 3 years in business as prescribed condition.
Generally Online Sellers opts for Voluntary registration to get themselves listed on various marketplaces, as TIN no. is mandatory requirement by Online Marketplaces.

Registration processing time depends upon primarily two factors i.e. Earliest time by which complete documentation is being provided by you to us for further processing of application. If documents are incomplete or not legible on some count, it is liable to be rejected and needs re-application which delays the process.
Secondly, it also depends upon govt. processing time spent on verification of physical documents as well Physical Inspections being carried out at your premises by the VAT Inspector.

VAT must be deposited by E-payment mode only latest by 21st of following Month/Quarter. Further, Dealers are required to file VAT/CST Returns by same date of 21st of following Month/Quarter. Dates may vary depends upon states you operate your business from.

Dealer should first know, what is the VAT Rate applicable on type of item being sold by them?, since State Govt. has prescribed item-wise Rates for various commodities across various schedules. This is essential for deciding on pricing of the product on every sale effected by the business.
VAT Rate is kept different across states, so VAT Rate for same commodity may be different in Maharashtra vis-à-vis say Gujarat or any other state. Further, Local sales are subject to Local VAT, while inter-states sales are to be charged as Central Sales Tax and rates depend upon commodity and sale against specified Forms.

If goods are sold outside India or exported from India, VAT is not applicable.

Input Tax Credit for VAT paid on Purchase of Goods for business purpose is allowed to be set-off against VAT liability on services provided. However, No input Tax Credit is allowed for CST Paid on Purchases.

As VAT is paid by purchaser and gets off-set against VAT payable on Sales. Effectively, it is the end consumer who bears the VAT burden as accumulated VAT is being embedded in the final retail sale price charged to end consumers. Business only pays VAT on the value-add/ margins of the goods.

For Special types of Business and Small Retailers with turnover in the range of 10 Lacs to 50 Lacs, govt. has provided Composition Scheme option, where dealer choose to pay taxes at lower prescribed flat rates with simple compliances. They are also required to file only Quarterly (Annual Returns in some cases) Returns to the govt. ensuring reduced compliance cost.


How can we help with VAT Registration

We can get your VAT registration with complete professional support in estimated 20-25 working days with following Steps:-

Our team will understand nature of your business and suggest Normal/Composition/Voluntary schemes under which applications to be made for VAT. You need to send across entire documentation for Business as well as Partners/Directors as explained above and we will review and compile the same in about 1 working days time.

We will prepare Application for VAT Registration, Review and submit in Online as well as Offline mode through our affiliates to Govt. We will provide you Acknowledgement copies of application submitted in 5 working days time from application.

Your VAT application will be processed by Govt. department and physical documents will be verified by them and may need physical inspection at your office by VAT Inspector. Once approved, we will provide you the VAT Registration Certificate with TIN Number as soon as received from govt., which generally takes approx. 10-15 working days, subject to govt. processing time.

Documents required for VAT Registration

To be submitted by Proprietor/Partner/Directors

Copy of PAN Card of Proprietor/Partner/Directors

Copy of Rent agreement (If rented property)

Landlord NOC (Format will be provided)

Passport size photograph of Proprietor/Partner/Directors

Latest Electricity/ Maintenance bill (Place of Business)

Copy of Aadhaar Card/ Voter identity card

Copy of Property papers (If owned property)

To be submitted by Firm/LLP Company

Copy of PAN Card of Business entity

Memorandum and Articles of Association

Partnership Deed Copy/ LLP Agreement or Incorporation Certificate

Authorization by Directors/ Partners

Board Resolution in case of Company

Why India Kickstart?

About India Kickstart

Just tell us a little bit about your business and you’ll have the incorporation certificate in 20 working days. It’s that simple. In addition to yours, we’ll be handling around 400 requests this month.

Customer Score

We make your interaction with government as smooth as is possible by doing all the paperwork for you. We will also give you absolute clarity on the process to set realistic expectations.

Strong Team

Our team of experienced business advisors are a phone call away, should you have any queries about the process. But we’ll try to ensure that your doubts are cleared before they even arise.