registration under vat
This query is : Resolved
05 January 2011
my client residing at Andheri
Proprietor
business : cartage refilling at railway booking centres
received tender in may 2010
raised first bill on 10 dec 2010 of Rs. 20 Lacs
Whether vat registration required ? if yes under which head? how to do vat registration ? online or physical. what document required to be submitted?. i do not have any idea about VAT.
will you pl guide me in this regard.
Proprietor
business : cartage refilling at railway booking centres
received tender in may 2010
raised first bill on 10 dec 2010 of Rs. 20 Lacs
Whether vat registration required ? if yes under which head? how to do vat registration ? online or physical. what document required to be submitted?. i do not have any idea about VAT.
will you pl guide me in this regard.
06 January 2011
Yes your client is liable for VAT under Work Contract. Apply for VAT Registration at early at possible as per your information only single bill or your client exeeding limit of TH TO in very first bill. You may get registration on line or off line as you wish.
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09 January 2011
sir
i would like to know whether i should opt for composit scheme?
i would like to know whether i should opt for composit scheme?
10 January 2011
In which state you are liable to register Mention it. in Compositin you have to pay 5%, 4% or 3% (What you choose) of Gross Receipts in WCT only TDS (WCT) credit allow to you. other wise 25% Labour component, Actual or maximum 15% hire charges Deduction, Actual or maximum 5% Power and Lubricants charges deduction, 100% Input VAT Credit and 100% Credit of TDS you can get. If your TO is less then 3 crore and purhcase is very low then go for Composition, otherwise maintain the record properly and for get Composition.
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10 January 2011
hitenderji
query continues...
A from maharastra, not yet registered under MVAT, give subcontract of the work mentioned in 1st query for gujrat state to B registered dealer.
B raised bill on A
whether A can make payment before geting registered.
whether A is liable to deduct WCT?
WCT at what rate?
query continues...
A from maharastra, not yet registered under MVAT, give subcontract of the work mentioned in 1st query for gujrat state to B registered dealer.
B raised bill on A
whether A can make payment before geting registered.
whether A is liable to deduct WCT?
WCT at what rate?
20 July 2025
Thanks for sharing the details and your queries related to VAT and WCT (Works Contract Tax) registration and compliance. Let me break down the points clearly for you:
1. Is VAT registration required?
Yes. Your client is liable for VAT registration because:
The client received a tender in May 2010.
Raised the first bill of Rs. 20 Lacs (Rs. 2 million) on 10 Dec 2010.
In Maharashtra, VAT registration is mandatory if the turnover exceeds the threshold limit (which was Rs. 5 Lakhs for goods and Rs. 10 Lakhs or Rs. 12 Lakhs for works contract/business services, depending on the state rules around that time).
Since your client has already crossed the threshold in a single bill, VAT registration is mandatory.
2. Under which head is VAT applicable?
For the business of cartage refilling at railway booking centres, it falls under Works Contract Tax (WCT) in Maharashtra.
Works Contract is a composite contract for transfer of property in goods involved in execution of works.
VAT on works contract is governed under a special composition scheme in Maharashtra.
3. How to do VAT registration?
Online registration is available through Maharashtra VAT Department's website.
Offline (physical) registration is also possible by submitting the application in person at the local VAT office.
Online registration is faster and more convenient.
4. Documents required for VAT registration:
Usually, you need to submit:
Application form (Form VAT-100).
PAN card of proprietor or business.
Proof of business address (rent agreement, electricity bill, etc.).
Proof of identity of proprietor (Aadhar card, voter ID, etc.).
Partnership deed if applicable.
Details of business bank account.
Tender copy or work contract proof.
First bill or invoice copy showing turnover.
Declaration form.
5. Additional details about VAT on works contract:
You can opt for Composition Scheme (if turnover < Rs. 3 crore approx) where tax is paid on gross receipts.
Rates vary — composition tax can be 3%, 4%, or 5% on gross receipts depending on your choice and business type.
If not opting for composition, detailed accounting is needed to separate labour and material components.
Input VAT credit is available only if registered and maintaining proper records.
6. Regarding subcontractor and WCT deductions (query dated 10 January):
A (Maharashtra dealer, not yet registered under MVAT) gives subcontract to B (registered dealer in Gujarat).
B raises the bill on A.
Points:
A should get registered under MVAT ASAP due to turnover.
Payment can be made even if A is not registered, but legally registration is mandatory to comply with tax laws.
A is liable to deduct WCT only if the contract is for works contract in Maharashtra.
WCT rate varies between 2% to 5% in Maharashtra depending on the nature of contract and government notifications.
Since B is registered in Gujarat, interstate transaction provisions may apply, and VAT on interstate works contract may be governed differently.
Proper cross-check needed based on place of supply and type of service.
Summary & Recommendations:
Step Action
VAT Registration Mandatory, preferably online through Maharashtra VAT portal
Documents PAN, proof of address, identity proof, tender copies, invoices
VAT Head Works Contract Tax (WCT)
Composition Scheme Option Available if turnover < 3 Cr, pay 3-5% on gross receipts
WCT Deduction A liable if subcontract in Maharashtra, deduct 2-5% WCT
Interstate subcontract Complex, may involve CST or VAT, consult local tax expert
1. Is VAT registration required?
Yes. Your client is liable for VAT registration because:
The client received a tender in May 2010.
Raised the first bill of Rs. 20 Lacs (Rs. 2 million) on 10 Dec 2010.
In Maharashtra, VAT registration is mandatory if the turnover exceeds the threshold limit (which was Rs. 5 Lakhs for goods and Rs. 10 Lakhs or Rs. 12 Lakhs for works contract/business services, depending on the state rules around that time).
Since your client has already crossed the threshold in a single bill, VAT registration is mandatory.
2. Under which head is VAT applicable?
For the business of cartage refilling at railway booking centres, it falls under Works Contract Tax (WCT) in Maharashtra.
Works Contract is a composite contract for transfer of property in goods involved in execution of works.
VAT on works contract is governed under a special composition scheme in Maharashtra.
3. How to do VAT registration?
Online registration is available through Maharashtra VAT Department's website.
Offline (physical) registration is also possible by submitting the application in person at the local VAT office.
Online registration is faster and more convenient.
4. Documents required for VAT registration:
Usually, you need to submit:
Application form (Form VAT-100).
PAN card of proprietor or business.
Proof of business address (rent agreement, electricity bill, etc.).
Proof of identity of proprietor (Aadhar card, voter ID, etc.).
Partnership deed if applicable.
Details of business bank account.
Tender copy or work contract proof.
First bill or invoice copy showing turnover.
Declaration form.
5. Additional details about VAT on works contract:
You can opt for Composition Scheme (if turnover < Rs. 3 crore approx) where tax is paid on gross receipts.
Rates vary — composition tax can be 3%, 4%, or 5% on gross receipts depending on your choice and business type.
If not opting for composition, detailed accounting is needed to separate labour and material components.
Input VAT credit is available only if registered and maintaining proper records.
6. Regarding subcontractor and WCT deductions (query dated 10 January):
A (Maharashtra dealer, not yet registered under MVAT) gives subcontract to B (registered dealer in Gujarat).
B raises the bill on A.
Points:
A should get registered under MVAT ASAP due to turnover.
Payment can be made even if A is not registered, but legally registration is mandatory to comply with tax laws.
A is liable to deduct WCT only if the contract is for works contract in Maharashtra.
WCT rate varies between 2% to 5% in Maharashtra depending on the nature of contract and government notifications.
Since B is registered in Gujarat, interstate transaction provisions may apply, and VAT on interstate works contract may be governed differently.
Proper cross-check needed based on place of supply and type of service.
Summary & Recommendations:
Step Action
VAT Registration Mandatory, preferably online through Maharashtra VAT portal
Documents PAN, proof of address, identity proof, tender copies, invoices
VAT Head Works Contract Tax (WCT)
Composition Scheme Option Available if turnover < 3 Cr, pay 3-5% on gross receipts
WCT Deduction A liable if subcontract in Maharashtra, deduct 2-5% WCT
Interstate subcontract Complex, may involve CST or VAT, consult local tax expert
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