VAT & CST REGISTRATIONS

Value Added Tax (VAT) is an Indirect tax imposed, where buyer and seller of goods is within a state. India does not have a classic Value Added Tax (VAT) structure. Instead, separate tax on sale of goods and on rendering of services is imposed under different legislations. Sale and purchase of goods is subjected to charge of sales tax.

Central Sales Tax (CST) is an indirect tax levied, where the buyer and seller of goods are in different states and movement of goods is from one state to another. Sales tax is levied under Central and State Sales Tax legislations depending upon the movement of goods in pursuance of a sale transaction. If the transaction involves movement of goods from one state to another (inter-state), the tax is levied under Central Sales Tax Act (CSTA), 1956.

Documents required at the time of VAT registration vary from State to State. Normally, the following are asked for:

VAT Registration, Bangalore

VAT Registration for Company:

• 3 Passport Size Photographs of each of the Directors
• Rental Agreement of Business
• PAN of the COMPANY
• Electricity bill of the COMPANY
• Electricity bill of Directors if rented house / property tax receipt if own house
• Board Resolution
• Bank account details
• MOA AOA & COI
• Address & ID proof of the Directors

VAT Registration for LLPs / Firms:

• 3 Passport Size Photographs of each of the Partners
• Rental Agreement of Business
• PAN of the LLP / Partnership Firm
• Electricity bill of the LLP / Partnership Firm
• Electricity bill of Partners if rented house / property tax receipt if own house
• Authorisation Letter
• Bank account details
• LLP Agreement / Partnership Deed
• Certificate of Incorporation / Firm Registration Certificate
• Address & ID proof of the Partners.

VAT Registration for Proprietorship Concern:

• 3 Passport Size Photographs of the Proprietor
• Rental Agreement of Business + electricity bill of business premises
• PAN of the Proprietor
• Electricity bill of the Proprietor
• Bank account details of the firm
• Address & ID proof of the Proprietor

This Act also covers transactions of import of goods into or export of goods out of India. Sales tax is not imposed on import of goods into the country or export of goods out of the country. The Central Sales Tax (CST) Act is administered by the state governments and the tax is levied at the origination of transaction (origin based levy). The revenue collected under Central Sales Tax Act is retained by the state governments. The rates of tax under Central Sales Tax Act vary from state to state and product to product. The standard rate of CST is 4 per cent or the lower rate applicable in the state of seller if the purchaser is purchasing the same for resale or for use in manufacture of goods for sale or for specified purposes and both the seller and buyer are registered dealers. Otherwise, the rate is higher of 10 per cent or the rate applicable in the state of sale. The transactions of sales or purchases involving movement of goods within a state (intra-state) are governed by respective State Sales Tax Acts. States also levy tax on transactions ,which are "deemed sales" like works contracts and leases. A works contract essentially is a contract for carrying out work involving supply of labour and material ,we the property in the materials passes during the course of execution of the contract. Lease is a transaction involving transfer of right to use goods.

VAT Audit VAT legislation requires a VAT audit certificate/report issued by a chartered accountant in a prescribed format. The format for each state is different, but generally has the same requirements. The due date for signing the VAT audit report/certificate varies from state to state and ranges between the months of September and December. Generally, VAT audit is applicable to all dealers who are liable to pay VAT provided their turnover of either sale or purchase exceeds a specified limit. Further, VAT audit is also mandatory for specified categories of dealers, as prescribed by state legislation.