VAT Registration | Sales Tax Registration

VAT is the tax a dealer pay while purchasing raw materials and what the end-consumer pays to the dealer. The number given for sales tax / VAT registration under the Vat Act is called Tax-payer Identification Number (TIN) or VAT registration Number or Sales tax registration number. A dealer is a person who purchases, sells, supplies or distributes the goods in the course of his business for valuable consideration. The sales tax / VAT is generally a fixed percentage for certain types of goods which varies from state to state. Sales tax / VAT is imposed in each transaction of sale of product. The dealers who's turnover in respect of purchase and sales exceeds Rs. 10 lakhs have to get them registered with Sales tax / Vat. Since VAT is a State Act, Registration has to be done separately for each state, if the dealer wants to do trading in the respective state. The VAT is applicable for purchase and sales within state and CST is applicable for purchase and sales outside state.

VAT Registration in Coimbatore

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EXEMPTED SALES

An exempted sale is a sale on which tax is not applicable and Input Tax Credit is also not available.

ZERO RATE SALE

Zero rate sale is a sale for which tax is not levied but the tax paid on local purchases is refunded to.
The Value Added Tax Act specified the zero rated sales as:

  •   Export Sec.5(1)
  •   Sale in the course of export [5 (3) of CST Act, 1956] (ie) Sale to Exporters
  •   Sale to International organizations
  •   Sale to SEZ

Set off of tax paid

VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods, other than special goods.

Compounding System of Tax

  • The dealers who do second and subsequent sale in the State. The Act provides tax at a rate of 0.5% as notified by Government for the dealers whose total turnover for a year is less than Rs. 50 lakhs.
  • The works contractors may opt to pay at compounded rates at 2% (civil), 4% (others) instead of paying tax at the rate prescribed for the goods involved.
  • The hotels, restaurants and sweet stalls may opt to pay tax at compounded rate prescribed in the Act at slab rates where total turnover is not less than Rs.10 lakhs but not more than Rs.50 lakhs. No Input tax credit is allowable to those dealers who have opted for compounded system

Due date for Return:

Every registered dealer needs to file returns for every month on the 20th day of succeeding month.



VAT/ Sales Tax Registration