Compliance of the suppliers

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

01 September 2012 Pls inform regarding,
Person have obtained dealership from a pune based company to sell the computers & its accessories in Rajashthan. He have incorporated a firm & taken tin no. and in current year sold the product nearly amounting Rs.10,00,000/-.

Now he want to sell those products by the name of his mother.
So now what he must do? Will he require to take a new tin no. & also have to take dealership in his mother`s name or there is any other possible way.

Also inform about the VAT, CST, TDS & any other compliances in above cases.

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2012 anybody pls inform.......

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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19 July 2024 In the scenario described, where the person wants to sell products under his mother's name after initially obtaining a dealership in his own firm's name, here are the steps and considerations:

### Changing Name of Dealer or Transfer of Dealership:

1. **Dealership Transfer**: Typically, dealerships are specific to the entity (firm, company) that initially obtains them. If the person wishes to sell products under his mother's name, he may need to transfer the dealership officially from his firm's name to his mother's name.

2. **New TIN Registration**: If the dealership needs to be transferred to his mother's name, she would need to obtain a new TIN (Taxpayer Identification Number) under her name. This would involve registering a new firm or entity under her name and applying for a TIN with the local Sales Tax or Commercial Tax department in Rajasthan.

3. **Documentation**: The process of transferring dealership ownership typically involves notifying the Pune based company that granted the dealership and completing any necessary paperwork or agreements to transfer the rights and responsibilities.

### Tax and Compliance Considerations:

1. **VAT (Value Added Tax)**: In Rajasthan, any person selling goods needs to register for VAT if their turnover exceeds the threshold limit prescribed by the state government. The mother, once registered, would need to collect and remit VAT on sales made in Rajasthan.

2. **CST (Central Sales Tax)**: If the mother sells goods to customers outside Rajasthan, CST might be applicable on interstate sales. Registration for CST may be required depending on the nature and volume of sales.

3. **TDS (Tax Deducted at Source)**: TDS provisions apply if payments made to the Pune based company or other vendors exceed specified thresholds. The firm (or now the mother's entity) must deduct TDS at applicable rates and deposit it with the tax authorities.

4. **Other Compliances**: Apart from VAT and CST, other compliance requirements may include maintaining proper books of accounts, filing periodic returns, and complying with any local regulations regarding business operations.

### Practical Steps:

- **Consultation with Tax Consultant**: Given the complexity and legal implications involved in transferring dealership and managing tax compliances, it's advisable to consult with a qualified tax consultant or a chartered accountant who can guide through the process and ensure compliance with all applicable laws.

- **Registration Process**: Initiate the process of registering a new firm or entity under the mother's name in Rajasthan. This includes obtaining a new TIN from the Sales Tax department.

- **Notification to Suppliers**: Inform the Pune based company and any other suppliers or vendors about the change in dealership ownership and update their records accordingly.

By following these steps and ensuring compliance with VAT, CST, TDS, and other regulatory requirements, the person can smoothly transition the dealership and start selling products under his mother's name in Rajasthan. Professional advice is crucial to navigate the legal and tax aspects effectively.

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