Sales Tax Registration

MEANING

The Registration of sales tax is mandatory in India for any business entity engaged in the sale of goods. No VAT is levied on the goods exported.

VAT Registration replaced the sales tax registration in India and is now, synonymous with CST and TIN Registration.

Value Added Tax (VAT) Registration is mandatory for businesses trading or manufacturing goods in India. The State Government governs and collects VAT, and hence, State Government in India has different rules applicable for their concerned State based on the type of goods manufactured or sold which makes VAT regulations unique to each state. VAT is a multi-stage tax which allows ‘Input tax credit (ITC)’ on tax at an earlier stage, which can be then appropriated against VAT liability on subsequent sale. Hence, VAT is ultimately borne by the consumer itself.

Sales Tax Registration is mandatory if the annual turnover of the business crosses Rs. 5 lakhs in many states, though some states have raised this threshold limit to Rs. 10 lakhs. When registered for VAT, the manufacturer or trader is allotted with a unique 11 digit number known as the TIN Number for the business.

STATE LEVEL TAX

VAT is collected by the State Governments. Each State has a different VAT Regulation based on the type of goods sold.

ENDS CONSUMER BEARS VAT

All purchasers of goods must mandatorily pay VAT. However, in each stage, the person purchasing the goods is allowed to set-off the VAT paid against the VAT liability on sale which makes the consumer pay the VAT.

DUE DATES

VAT Returns must be filed on every 20th monthly. VAT Payments must be deposited in the banks quarterly in case of LLPs or Partnership Firms or Proprietary Firms and monthly in the case of other type of businesses.

SAME VAT/TIN/CST

VAT/TIN/CST has the same unique 11 digit number. Therefore, VAT/TIN/CST is the same and obtaining VAT Registration from the State authorities will serve as TIN or CST Registration also.

APPLICABILITY OF REGISTRATION

The following establishments employing 10 or more persons attract ESI contribution;

1. Shops 
2. Restaurants 
3. Theatres 
4. Roadside Motor Transport Establishments 
5. News paper establishments 
6. Medical Institutions 
7. Private Educational Institutions 

In some states the minimum employees required is 20 or more. Also, few State Governments have not extended the scheme to include Medical & Educational Institutions.

DOCUMENTS REQUIRED

1. FOR PROPRIETORS/PARTNERS/DIRECTORS
2. Copy of PAN Card 
3. Copy of Aadhaar Card/Voter’s identity card 
4. Passport sized photographs 

IN CASE OF ENTITY

1. PAN Card copy of company 
2. Copy of Property papers (for owned property) 
3. Rental agreement copy (for rented property) 
4. MOA/AOA (company) 
5. Incorporation Certificate (company) 
6. Copy of Partnership Deed (Partnership) 
7. Electricity/Water/Telephone bill of business address. 

REGISTRATION PROCESS

PAN cards, identity and address proofs of the proprietor/partners/directors needs to be submitted. Private limited companies must submit the MOA and AOA, Form 18, Form 32 and the Incorporation Certificate, while Partnership firms must submit the Partnership Agreement.

The rental agreement for the business address, if rented, with the electricity bill.

The application will be then processed by the concerned department involving a physical inspection. After approval, the Taxpayer Identification Number (TIN), an 11-digit number, will be issued along with a certificate to the concerned person.