FILING SALES TAX
Value Added Tax (VAT) Registration or Taxpayer Identification Number (TIN) Registration is a tax registration required for business trading or manufacturing goods in India. Any business entity engaged in the sale of goods in India with the turnover of over Rs. 5 Lacs is mandatory to register Sales Tax. VAT is collected and represented by the state government, so every state government in India has distinct guidelines applicable for their state based on the type of goods manufactured or sold.
After registration of VAT, the producer or dealer is allotted a unique 11 digit number which will serve as the TIN Number for the business.
If you are a registered dealer, you must file VAT returns. Payment of tax has to be done before the filing of returns. E-filing of VAT returns is permitted in various states across India.
FEATURES OF SALES TAX
- VAT is a tax levied on sale of goods within the state in India. Producer and dealer should obtain VAT registration, if their annual sale is more than Rs. 5 lacs (Rs. 10 lacs in some states)
- VAT is determined and collected by state government, so each state has different VAT rules and regulations.
- VAT is not levied on goods which are exported from India.
- Payment of VAT is deposited in designated bank quarterly in case of Proprietary Firms, Partnership Firms or Limited Liability Partnership and monthly in case of another type of business entities like Companies.
- The VAT rate will depend on the type of goods being sold and the State in which the goods is being sold.
- To obtain sales tax registration, a copy of PAN Card, proof of address of business, constitution of the business
[Partnership deed, Incorporation Certificate, etc.,] and Identity Proof of Promoters is required.
- VAT Registration applies if the annual turnover of the business crosses Rs. 5 lacs in most states, though some have raised this to Rs. 10 lacs.
- VAT payments must be deposited by Proprietary Firms, LLP and Partnership Firms quarterly. Other entities are required to make VAT payment monthly.
- VAT returns are due on the 20th of every month. The VAT information must be filed on the 20th of next month.