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VAT

About VAT

A value added tax (VAT) is a form of consumption tax. From the perspective of the buyer, it is a tax on the purchase price. VAT is levied at the value additions at the different stages of production .The basic reason for the introduction of VAT is to arrest the increasing smuggling and cheating, which were resultants of high sales tax and tariffs. From that of the seller, it is a tax only on the value added to a product, material, or service, from an accounting point of view, by this stage of its manufacture or distribution. However, it is different from the sales tax because a sales tax is levied on the total value of the exchange. VAT is neutral with respect to the number of passages that there are between the producer and the final consumer.

Applicability of VAT

Any trading or manufacturing business, whether a sole proprietorship/ firm/ company, that sells its products is liable to be registered for VAT.

Documents Required for VAT Registration (all the documents should be self attested)
  • PAN card & address proof of proprietor/ partner/ director.
  • Passport size photograph (2), of proprietor/ partner/ director.
  • Rent agreement, sales deed, and lease deed of business premises, if rented.
  • Partnership deed/ LLP agreement in case of firm/ LLP.
  • MOA & AOA copy, board resolution and authorizing letter in case of company.
  • PAN card & address proof (along with electricity bill) of proprietorship firm/ partnership firm/ company.
  • Cancelled cheque of business bank A/C.
DVAT Rates
  • 1% Rate - Goods listed in the Second Schedule.
  • 5% Rate - Goods listed in the Third Schedule and the printing works contracts.
  • 20% Rate - Goods listed in the Fourth Schedule.
  • 12.5% Rate - Goods involved in the execution of works contracts except printing works contract.
  • 12.5% Rate - Any goods not mentioned in the Second, Third and Fourth Schedules or in the First Schedule (exempted goods).
  • Rates of 0.1%, 1%, 2.5 & 3% applicable for bullion traders, drugs and medicines traders and works contractors under composition scheme notified for them in accordance with the conditions mentioned in these schemes. Rate of 1% applicable to the dealers having turnover up to Rs. 50 Lakhs and Rs. 1 Cr in case of drugs & medicine dealers opting for the composition scheme in accordance with the conditions of the scheme.

Charges for registration in Service Tax (inclusive of govt. fee, our professional fee & out of pocket expenses) Rs. 8,000/-