i have just got my shop act license last month. i have proprietorship firm. business is selling art: paintings, pottery, craft items and clothing: t-shirts, jackets etc.
i have also opened business account in bank. i am bit confused about vat registration as my business has just started, but for selling anything online vat no. is needed.
when i tried to fill up form for vat on www.mahavat.gov.in, it showed options under
"reason for registration - 1.voluntarily 2.change in the constitution 3.part transfer of business
4.full transfer of business 5.exceding the prescribed turnover limit
6.full transfer of business due to death of proprietor
I don't understand the voluntary registration, and i fill all other options are not applicable to me.What should I enter as reason for registration and Why? What would be the cost of registration?Your answer would be of great help.
Asked in Business Law from Pune, Maharashtra
You would fall under voluntary registration and the official fees is Rs.25,00/- which interest free refundable money.
Voluntary registration is necessary for the trader who just starting his business and need tax saving and get benefit of startup facilities ( generally tax exemption ) from the govt.
MVAT as immediately after the voluntary registration he can claim the set off on the plant and machinery purchased by him. If voluntary registration is not done; VAT paid on plant and machinery purchase will be in vain as dealer can not claim the set off during unregistered period.
When dealer is trader and he want to purchase the large quantity of goods for the trading purpose before the sales starts. In such situation; voluntary registration is necessary as after registration dealer can claim the set off of the goods purchase.
1)the dealer who attains or crosses prescribed turnover of purchase or sale should apply for registration under VAT Act within 30 days from the date on which turnover crossed the prescribed limit. -
2)TURNOVER LIMITS FOR THE PURPOSE OF LIABILITY/ REGISTRATION [SEC.3(4) ]
CATEGORY OF DEALER TURNOVER 01/05/2012 TURNOVER OF TAXABLE GOODS PURCHASED OR SOLD
IMPORTER 1,00,000 10,000
OTHERS 10,00,000(w..e.f. 26/06/2014) 10,000
VOLUNTARY REGISTRATION: ? 5,000/- with a refundable interest free deposit of ? 25,000/- along with challan in Form 210.
OTHERS: ? 500/- only (payment of fees of ? 500 wherever applicable may be paid through court fee stamps also).
DD / PO of nationalized bank for all the above fees & deposit to be made in favor of “Bank of Maharashtra A/C MVAT” payable at Mumbai for Mumbai Jurisdiction and “State Bank of India, A/C MVAT” payable at respective jurisdiction
4) yours would be case of voluntary registration if your turnover does not exceed prescribed limit
The 1st option "Voluntarily" will be right option to tick because you are starting the new business where due to the circumstances you are applying for VAT, otherwise it may not be necessary in the new business. Therefore 1st option will be more suitable.
1. VAT registration is required if the yearly transaction crosses a particular amount,
2. In your case, it is not so and you are voluntarily registering the same,
3. Enter 'Voluntarily',
4. If there is nothing mentioned in the website asking you to pay for the said registration then it is free.
1. The reason for registration should be creation of proprietorship business.
2. Proprietorship itself does not require registration. You can begin to sell online after you get the VAT registration.