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Registration under VAT

Persons require registration under the VAT Act

All dealer prior to commencement of the VAT Act in the States, having a Registration Certificate either under Local Sales Tax Act or under Central Sales Tax Act are deemed to be the Registered Dealer. A new dealer will be given a 30 days time from the date of applicability of the Act in the State.

As per the White Paper on Value Added Tax published by the Ministry of Finance, the registration of dealers with gross annual turnover above Rs. 5 lakh will be compulsory. However every States is flexible to fix the threshold limit within Rs. 5 lakh for the small dealers.

Every State shall make the provision for voluntary registration of dealers who are not otherwise liable to pay tax. However the voluntary registration process are same as applicable to other dealers who are liable to pay tax under VAT.

Dealers with annual gross turnover not exceeding Rs. 50 lakh who are otherwise liable to pay VAT, shall however have the option for a composition scheme with payment of tax at a small percentage of gross turnover. The dealers opting for this composition scheme will not be entitled to input tax credit.

Registration process

The form of application to register and manner of making application, and the fee payable is prescribed by the State VAT Act in each State.

A properly filled application may be filed with the Commercial Tax Officer or Assistant Commissioner of Commercial Taxes or any other authority prescribed by the State VAT Act, who is having a jurisdiction over the principal place of business of the Applicant. On receipt of an application to register the prescribed authority shall register any such dealer and grant him a certificate of registration, if he is satisfied that the applicant is a bona fide dealer and that he complies with the requirements of the Act.

The certificate of registration will be issued with effect from the first day of the month following the month in which such application is made or from such earlier date as may be mutually agreed.

The prescribed authority may refuse to grant a certificate of registration to the applicant for any good and sufficient reasons to be recorded in writing, after allowing the applicant to show cause in writing against such refusal.

The Act may contains provision relating to suo moto Registration of dealer. The competent authority may after conducting such survey, inspection or enquiry as may be prescribed, finds a dealer liable to be registered has failed to inform the competent authority of his liability to be registered, proceed to register such person under the Act.

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