All you need to know about VAT Registration

Tax – a burden to most but important to know. As an entrepreneur, you must be drowning in the sea of taxes but here’s one (more) you should really know about!

The Value Added Tax (VAT) Act, replaced the old system of taxation of Sales Tax. However, like Sales Tax, the VAT comes under the Administration of State, hence, every state has their own set of rules, from Registration to Audit and Assessment. For inter state transaction, still there is Central Sales Tax (CST), Act, which is administered by the Central Government. .

As stated earlier, all states have their own set of rules, e.g., in Maharashtra the threshold limit to get the MVAT Registration is Sales of Rupees Ten Lakhs. That means, a dealer having Sales Turnover up to Rupees Ten Lakhs, may not require to get register under Maharashtra VAT Act and also not required to collect MVAT. However, in Maharashtra, by paying Rs. 25,000 Deposit, the dealer may apply for Voluntary Registration, whereby the Dealer has to charge VAT from the first bill.

Similiarly, those who are in Service Industry, providing services, are required to collect Service Tax, under the Service Tax Act, which is administered by the Central Government.

It is always, cumbersome, to know and comply with all these INDIRECT TAXES.

AND THE GOOD NEWS IS, THE GOVERNMENT IS PLANNING TO INTRODUCE GOODS AND SERVICE TAX (GST),  implementation of which shall scrap all other Indirect Taxes like Excise, Service Tax, VAT etc..

Lucky for entrepreneurs in Maharashtra, the registration process is now fully online at http://mahavat.gov.in. You don’t even need to visit the office with your original documents for registration. With the digital age, the government now approves scanned, softcopies as well.

Still unsure? Here’s more information along with a list of documents you need for registration!

We know dealing with finances isn’t everyone’s cup of tea and that’s why we are here to help you out. Keep yourself updated with the Financial Fridays!

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