VAT/ CST - A better understanding - Part 3

SANYAM ARORA (“It's hard to beat a person who never gives up.”)   (20168 Points)

31 August 2011  

                                                            " VAT / CST - A Better Understanding - Part 3

A Very good morning to all the members of CCI Family. So after successful completion of  two parts of my series, I am ready to introduce the thiird part of my series.

1. Introduction -

In this series i will talk about the process of registration and Liability i.e " who and when should register " and about all the forms required for Registration. 

2. Registration and Liability - 

A Dealer is required to register under the Dvat act, if :

- The gross turnover in the current year exceeds 10 lakhs,

- Makes any Inter state sales

- Makes any inter state purchases for resale in delhi.

The t/o for registration does not include -

(a) sale of capital goods

(b) sale made in course of winding up of business.

Imp. - For dealers involved in work contrcts, the T/O inludes the total value of contract or contracts executed in Delhi.

The dealer fulfilling any of the above conditions mentioned above is liable to get registered by appling in " DVAT 04 " in 30 days of crossing the threshold limit for registration. Any delay in getting registred will attract a penalty of1000 per day.

No Registration Required -

The dealer dealing in exempted goods, is not required to apply for registration under the Dvat ACT.

Voluntary Registration -

Only a Registered dealer can issue a Tax invoice and claim tax credits.The tax charged by a dealer may be claimed as tax credit by the purchasing dealer.Keeping in view this benefit the act provided for voluntary registration od dealer if he does not fulfil the mandatory requirement .

How to Register ....?

An application for registration may be made in the prescribed Dvat 04 under central act with documents and other requirements. A registration under the central act automatically leads to registration under the state act.

The application can be submitted at " CENTRAL Registration Cell " at an office situated on the first floor of vyapar bhavan. The dealer is required to file an security of re 1 lakh alongwith the application of registration.

If the application for registration is found to be in order, the registration shall be granted from the date of receipt of application in " D vat 06 ".

In case there is any irregularity in the application, a notice in Dvat 05 shall be issued within 15 days from date of application. The ground on which application is rejected will be enumerated in the notice and applicant shall be provided 15 days time to reply such notice.

 Ammendment of Registration -           

In the following cases the dealer shall inform the department in form NO. Dvat 07 within 1 month, if he,  

(a) sells or disposes his business in whole or in part,

(b) There is a change in any place of business,

(c) Discontinues his business

(d) changes the name, style, constitution or nature of his business.

The department concerned shall carry out the ammendments in form Dvat 08  and inform the dealer after making any enquiry if deemed necessary. The Dept. shall make ammendment from the date requested by the dealer.

So friends this comes to the end of 3 part of my series.

Thanks and Regards

Sanyam Arora