So starting a business and you came across this word VAT registration? Every person initiating a startup gets confused whether to do a Vat registration or not and whether is it beneficial or not.
Let us simplify it for you
VAT is ‘value added tax’ that is paid as a sales tax to government once every purchase is made from by someone. For e.g. if a toffee is of Rs.100 and government applies 10% VAT on that than the customer has to pay Rs.110 and the additional Rs.10 is paid to government as direct tax.
Value-added Tax (VAT) Registration is compulsory for business entity trading or manufacturing goods in India and has a turnover of more than Rs.5lakh (Rs.10lakhs in some states). It is a multi-stage tax that builds up at various stages of production and supply.
Basically sales tax is of two types:
1) VAT (Value Added Tax)
It is a valid tax imposed by the Government on the value added at a stage of production, distribution and at final sale of products and services before it reach to the end user. If any good is purchased or sold in the same state then applied VAT goes directly to the state government.
2) CST (Central Sales Tax)
Central Sales Tax is a tax levied by the Indian Central Government under Entry 92A of List I (Union List) of the Seventh Schedule to the Indian Constitution. It is applied when any good is purchased and sold between two different states and the collected CST goes to central government.
Tax Information Network (TIN) is a unique identifying number assigned by Internal Revenue Service (IRS) or Social Security Administration (SSA). This is a new registration number used by IRS for recognition of dealers registered under VAT. TIN consists of eleven digit numbers and the value will be unique all through the nation. First two digits represent the State Code as used by the Union Ministry of Home Affairs and the set-up of next nine characters may get changed for different states.
TIN may be
- Social Security Number (SSN)
- Employee Identification Number (EIN)
- Individual Tax Identification Number (ITIN)
- Adoption Tax Identification Numbers (ATIN)
- Preparer Tax Identification Number (PTIN)
Who is liable for VAT Registration
Any sole proprietorship, private limited company or a partnership firm who sells anything legally allowed to sold, be it products, goods or anything that can be touched or felt is liable to be registered for VAT.
Advantages of VAT Registration
- Make your company appear recognized and bigger
- Remove hassles of going through various receipts or documents to see VAT status as it can be done easily by punching VAT number.
- Mass participation of taxpayer.
- Transparent and has minimum exemptions
- Eligibility for VAT refunds
- Gives business a unique identity
- Build brand credibility among customers
- Get to use Set off
Here the question comes what is Set Off
Set off is basically the difference of the VAT given to the supplier and the VAT received from the customer. In simpler terms, VAT for a specific product has to reach the Government just a once. Hence, if you have already paid some VAT, you can take off it from what customer gave you.
Set off- (VAT you paid – VAT you received) – Payable to Government
Procedure for VAT Registration
Submit an application along with the required documents to the functional local VAT office.
The authorities from the local VAT office shall conduct a premises inspection within the prescribed time after submitting the application.
After the inspection, you will have to deposit the relevant fee to the local office for VAT registration
On payment of the specified fee, TIN number will be allotted for your business and VAT registration Certificate will be issued within a day.
How it is done?
These are the documents that is required to apply for a VAT number:-
- Address Proof
- Proof of first sale and first purchase
- Proof of Ownership of premises
- Cancelled Cheques
- Last 3 months bank Statement
- PAN card copy
- 4 PP Photographs
Additional Documents Required for Partnership
Additional Document Required for Private Limited
Memorandum of Association (MoA) and Articles of Association (AoA).
Additional Document Required for Companies
Incorporation Certificate of Company
This requirement may differ somewhat from state to state. Once these documents are verified and examined, a unique TIN number is given to applicant. For applicants who have Central Sales Tax (CST) number, this can be changed to TIN number on request by the tax department.
Missing any of the documents? Don’t worry; we will help you get them as well!
Steps you need to follow:-
Step1:- Receive free expert counseling on VAT-TIN Registration
Step2:- Pay 50% of the payment
Step3:- Submit the required documents self attested. Application process will start within 24 hours.
Step4:- Pay rest of the 50% payment at the time of execution & final submission of documents
Click on apply now and get it done right away!!
|Packages Starting from||INR 11,499/-[ All inclusive ]|
Our all-inclusive packages start from JUST INR 8,999/-
Speedy and efficient process of completing the registration within 21* days.
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Prices are inclusive of Taxes.
*Time period quoted is tentative and approximate
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