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Last updated on 23/06/2015.


Should I be registered for VAT?

Q.1. On 1 April 2006, I am registered for Gujarat Sales Tax, do I need to apply for a new VAT registration?
A.1. No. You will automatically be registered for VAT from 1 April 2006
Q.2. On 1 April 2006, I am registered for Central Sales Tax, do I need to apply for a new VAT registration?
A.2. No. You will automatically be registered for VAT from 1 April 2006.
Q.3. If I am already a licence holder under The Bombay Sales of Motor Sprit Taxation Act, but not a registered dealer under GST do I need to apply for new registration under VAT?
A.3. Yes, If you are not registered under the GST Act and if your annual turnover in the financial year 2005-06 is above the prescribed threshold limit you must apply for a new VAT registration before 30 April 2006.
Q.4. Who is required to be registered under VAT? What is the limit of turnover?
A.4. Any dealer whose total turnover of sales or purchase exceeds the limits specified under the Act is required to be registered under VAT. The limit is total turnover of Rs.5, 00,000/- with taxable turnover of Rs.10, 000/-in the preceding year or the current year.
Q.5. Can a dealer whose turnover has not exceeded the threshold limit get registration?
A.5. Yes, such dealer can apply for voluntary registration but such dealer shall have to deposit Rs.25, 000.
Q.6. Are there any special provisions for registration?
A.6. Yes,
  1. a dealer who undertakes occasional transaction of business in the State, called a casual dealer, shall be required to be registered on taxable turnover of Rs. 10,000/-
  2. a dealer who is registered or liable to be registered under the CST Act also will be required to be register under VAT.
Q.7. Will it be necessary for a dealer exclusively dealing in tax-free goods to obtain registration?
A.7. No. Such dealer is not required to obtain registration.
Q.8. Whether a dealer who is deemed to be registered under VAT can get registration cancelled on the ground of lower turnover for liability under VAT?
A.8. Yes, but the dealer has to continue registration under VAT for at least one year.
Q.9. What are the benefits of being registered?
A.9. When you calculate the amount of VAT you have to pay, you can claim input tax credit for the VAT you have paid on your business purchases. You can issue tax invoices to your customers who are registered dealers. This will enable them to claim Input Tax Credit for the VAT paid to you.
Q.10. Do I need to apply for separate registration if I operate my business in more than one place?
A.10. If you have more than one place of business within the State, the threshold limit applies to all such business places taken together. You are required normally to make a single application for registration.
Q.11. How will my customers know that I am a registered dealer?
A.11. When you register, you will receive a Registration Certificate. You must display this certificate in a prominent position at your place of business. If you have more than one place of business, you must obtain a duplicate copy of the Registration Certificate from the Department and display it at each place of business. You must also quote your Registration Certificate number on your tax invoices.
Q.12. What happens if I do not register?
A.12. There are benefits for those who get registered on time but not for those who fail to register at the right time. Most importantly, you are not eligible to claim input tax credit of VAT paid on your business purchases. For late registration, you will be required to pay the tax you should have accounted for and interest for the delayed payment. You could be liable to a penalty as well.
Q.13. What happens if I am registered but I sell or close down my business?
A.13. If your business is discontinued, you must bring this to the attention of the Department. You must apply in Form 103 to the Department within 30 days of the event.
Q.14. What happens if I change my place of business outside the area of registering authority?
A.14. You must inform the Department on Form 103 within 30 days of the change, and apply for new registration.
Q.15. What happens if I change the name of my business?
A.15. You must notify the Department within 30 days of the change.
Q.16. When should I apply for registration?
A.16. You must apply within 30 days of becoming liable for registration, that is when your turnover first exceeds the thresholds.

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