VAT CST TIN Sales Tax Registration in Delhi

VAT Registration

I heard many of our clients getting confused on the terms VAT CST LST Sales Tax TIN. So I decided to clear the ambiguities on Sales Tax.

Why VAT registration is required?

Value Added Tax (VAT) Registration is a tax registration required for businesses trading or manufacturing goods in India.

Is there any difference between VAT & Sales Tax?

VAT Registration replaced Sales Tax in India and is same with CST Registration and TIN Registration. VAT is a multi-stage tax with the provision to allow 'Input tax credit (ITC)' on tax at an earlier stage, which can be appropriated against the VAT liability on subsequent sale. Therefore, VAT is ultimately borne by the consumer.

VAT registration or TIN number is mandatory for all entities involved in the sale of goods and products. VAT regulations are unique to each State. 

Is VAT registration required direct after the entity is registered?

VAT is collected and governed by the State Government, so each State Government in India has distinct rules applicable for their State based on the type of good manufactured or sold. Hence, it is important for any business involved in the manufacturing or trading of goods to check the VAT rates applicable for the goods they sell in their state and comply with the relevant regulation. VAT Registration is mandatory in most states for traders or manufacturers having a turnover of more than Rs.5 lakhs per year (Rs.10 lakhs in some states). Therefore, manufactures or traders must be aware of the relevant state VAT regulation and obtain registration if required. When registered for VAT, the manufacturer or trader is allotted a unique 11 digit number which will serve as the VAT Number / TIN Number / CST Number for the business.

Points to be remembered on VAT REGISTRATION

a.       Value Added Tax (VAT) is a tax levied on the sales of goods in India Manufactures and traders should obtain VAT Registration, if they have annual sales of more than Rs. 5 lakhs (Rs. 10 lakhs in some states)

b.      End consumer bears VAT

All purchasers of goods in India must pay VAT. However, at each stage, the person purchasing the goods is allowed to set-off the VAT paid against the VAT liability on subsequent sale. Thereby making the end consumer pay the VAT

c.       VAT / TIN / CST are the same

VAT / TIN / CST utilize the same unique 11 digit number. Therefore, VAT / TIN / CST are the same and obtaining VAT Registration from the State authorities will suffice as the TIN or CST Registration also.

d.      State Level Tax

VAT is determined and collected by the State Governments. Therefore, each State has a different VAT Regulation based on the type of goods sold. Therefore, it is best for businesses to be aware of the State's VAT Regulation applicable to them.

e.       VAT Due Dates

VAT Payments must be deposited in designated banks quarterly in case of Proprietary Firms, LLPs or Partnership Firms and monthly in the case of other type of business entities like Companies. VAT Returns must be filed monthly on the 20th.

f.       NO VAT on Exports.

For goods exported from India, VAT is not applicable. Therefore, exporters of goods are not required to pay VAT. However, it is advisable for exporters to obtain VAT registration.

Documents Required for VAT Registration

A) Personal detail of authorised director (Attested): 

1) PAN Copy

2) Address proof (Electricity bill)

3) Telephone Bill 

4) 2 photograph of director

B) Detail of Company (Attested):

1) PAN Copy 

2) Certificate of Incorporation

3) Memorandum of Association and Article of Association

4) Cancelled Cheque 

5) Board resolution authorising any one Director for VAT application process 

6) Details of branch - Address proof and RC copy of State VAT registration

C) Premises detail (Attested):

1) Address Proof Copy (Electricity Bill)

2) Rent Agreement 

3) Photograph of place with board including left right location

For more details, Contact CS Neha Seth at csnehaseth@gmail.com or call us at +919871903449