Friday, January 21, 2011

WHEN DO I BECOME LIABLE TO REGISTER FOR VAT?

If you are in business in the categories listed in the Answer to the Question 1 above, you must register prior to the commencement of your business. For other businesses, if you are commencing a business and expect your taxable turnover to exceed, in 12 consecutive calendar months Rs.40 lakhs you must register for VAT at the commencement of the business.

If you intend to make inter-state purchases or sales or intend to dispatch goods outside the State other than by way of sale, then you must apply for VAT registration before applying for CST registration.

Other dealers have to consider their taxable turnover for the preceding 3 months and preceding 12 months. If during the past 3 months their taxable turnover exceeded Rs.10 lakhs, or exceeded Rs. 40 lakhs in the past 12 months, they must apply for VAT registration by the 15th of the following month.

Illustration: If your taxable sales exceeded Rs.10 lakhs during the preceding 3 months ending August 2005 say on 25.08.2005, your liability to be registered as VAT dealer arises at the end of August 2005.

The time to apply for VAT registration in this case is on or before 15.09.2005. You will be registered with effect from 01.10.2005.This is the date from which you are liable to charge and pay VAT. For the earlier period i.e., before 1.10.2005, you are liable for TOT.

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