The Value Added Tax (VAT) in India is a state level multi-point tax on value addition which is collected at different stages of sale with a provision for set-off for tax paid at the previous stage

By on 13-11-2018

SALES TAX REGISTRATION

The Value Added Tax (VAT) in India is a state level multi-point tax on value addition which is collected at different stages of sale with a provision for set-off for tax paid at the previous stage i.e., tax paid on inputs. It is to be levied as a proportion of the value added (i.e. sales minus purchase) which equivalent is to wages plus interest, other costs and profits. It is a tax on the value added and can be aptly defined as one of the ideal forms of consumption taxation since the value added by a firm represents the difference between its receipts and cost of purchased inputs. Value Added Tax is commonly referred to as a method of taxation whereby the tax is levied on the value added at each stage of the production/distribution chain. As against the existing regime under which goods are charged to tax at Single point, or multi-point on the value of the goods, without any credit being given for taxes paid at the preceding stages. VAT intends to tax only the value added at each stage and not the entire invoice value of the product. By ensuring that only the incremental value is taxed, VAT aims at eliminating the cascading effect of taxes on commodities, and thereby reduces the eventual cost to the consumer.

Registration

 Every dealer up to the retailer level is required to be registered with the Sales Tax department to avail the credit of input tax. However, there would be a threshold turnover level. The retailers with turnover below the threshold can opt not to register, but pay a nominal composition tax. However, such dealers are not entitled to take credit of prior stage tax, nor can they pass the credit to their buyers. In effect, the VAT chain breaks at their stage.
Those opting not to register under VAT can opt for general registration. Registration of dealers with gross annual turnover above the threshold limit will be compulsory. There will be provision for voluntary registration for dealers with gross annual turnover of less than the threshold limit.

 Details Required For Sales Tax & CST Registration

• Registration fee (by DD)
•  Two passport size photographs
•  Self-attested copy of Passport / Electoral Id Card / Driving Licence; and PAN card if any.
•  Declaration stating the name of the person who shall be deemed to be the manager .
•  If company
  A. A copy of the Memorandum of Association and Articles of Association and Certificate of Incorporation ,
  B. Certified copy of resolution of it s Board of Directors to apply for registration and authorization, and
  C. A statement showing the details of authorized signatories in Form No. 2A
• Notarized affidavit in stamp paper of Rs .100.
• Copy of Lease Deed to be notarized
•  Self-attested copy of Licence from Corporation / Municipality/GramaPanchayat.
•  Copy of Provisional SSI Registration Certificate / IEM/ Letter of Permission, if any.
•  Security deposit as given below in the form of bank guarantee/ Demand Draft / National Savings Certificate/ Fixed Deposit.
• One self-addressed envelope of size 5’x11’stamped for Rs .25/ -.