Under MVAT Act, the limits now are fixed on sales side and not on purchase side. The Limit of sales for Registration is. Rs.5.00 lacs. If you cross the sales limit of Rs.500000/= in any accounting year you are eligible for MVAT registration.
And you have to Pay VAT on the total sales - Rs.500000/= as per the schedule entries. (This Rs.500000/= is one time)