Value Added Tax (VAT( services

What is VAT?

VAT is considered to be one of the most radical reforms implemented for the Indian economy. It is basically a sales tax collected by the government of the state in which the final consumer is located, or in other words, by the government of destination state on consumer expenditure. VAT replaced the Delhi Sales Tax Act and came into effect from 1st April 2005.

VAT provides set-off for the tax paid earlier through input tax credit/rebate. This input tax credit can be set off by a registered dealer against the amount of his output tax. VAT is based on the value addition to the goods.

Registration: It is mandatory for all traders with gross annual turnover above Rs. 10 lakh to register for VAT. All traders who were initially registered under the Delhi sales tax were automatically registered under VAT Act. A new dealer is allowed 30 days time period from the date of liability to get registered.

Composition scheme: Traders with gross turnover not exceeding Rs. 50 lakh who are otherwise liable to pay VAT, can opt for a composition scheme with payment of tax at small percentage of gross turnover. The dealer option composition scheme will not be entitled to input credit.

Returns: Under VAT, dealers have to file monthly/quarterly reports, accompanied with the payment challans, as specified in the State Acts/rules. Returns will be scrutinised expeditiously within prescribed time limit from the date of filling the return. In case of any technical error, dealer will be required to pay the deficit appropriately.

Taxpayer's identification number (TIN): This consists of 11 digits throughout the country. The first two characters represent the state code as used by the union ministry of home affairs; the remaining nine characters may, however, be different in different states.

Tax invoice: A registered dealer making a sale to another registered dealer in Delhi, s/he can issue a tax invoice mentioning:

  • The word 'Tax Invoice' in a prominent place
  • Identity of the seller (with registration number, name & address) [Pre-printed]
  • Identity of the buyer (with registration number, name & address)
  • Description, quantity, volume and value of goods sold and services provided
  • Amount charged with the amount of tax charged in the transaction indicated separately

Retail invoice: This can be issued in case of sales that are more numerous and of smaller amounts. While it is mandatory to identify the seller's name on the invoice, the mention of a buyer's name is optional. Sale price has to include tax charged thereon. The word 'retail invoice' or 'bills' has to be mentioned prominently on the invoice. No tax credit can be availed by the purchaser on the strength of retail invoice.

Central Sales Number VAT: In the case of interstate sale/purchase, the old provision of central sales tax act is applicable. The central statutory forms, i.e. Form C,D,F,H etc., shall continue to remain applicable.

For traders/ manufacturers in Delhi, We provide following services:

  • Obtain registration under VAT in Delhi
  • Sales exemptions
  • Identify your Ward/Assessing officer
  • Rate of VAT under Delhi VAT act
  • Appeal, revision and rectification of order
  • Statutory dorms and how to get these forms
  • Taxability of sale of fixed assets
  • Amendment in registration certificate
  • Refund of tax
  • Regular assessment