Vat Registration in Chennai
Sales Tax / VAT Registration

Sales tax / VAT is the tax paid to government for the sale of certain goods . A dealer is a person who purchases, sells, supplies or distributes the goods in the course of his business for valuable consideration. The sales tax / VAT is generally a fixed percentage for certain types of goods and services from place to place or state to state. Sales tax / VAT is levied in each transaction of sale of product, From Manufacturer to Wholesaler, Wholesaler to Retailer and Retailer to Customer. The dealers whos turnover in respect of purchase and sales exceeds Rs. 10 lakhs have to get them registered mandatorily. Since VAT is a State Act, Registration has to be done separately for each state, if the dealer wants to do trading in the respective state.

  • VAT – Value Added Tax (Intra state Trading) -
  • When sales and purchase i.e trading of goods and services is done within the state, then VAT is applicable.

  • CST - Central Sales Tax (Inter state Trading) -
  • When sales or purchases i.e trading of goods or services take place between states, then CST is applicable.

Document required for Sales Tax / VAT Registration
Company:
  • Self certified - Memorandum of Articles & Articles of Association of company, Certificate of Incorporation
  • Self attested copy of PAN of Company
  • Bank account details of Company.
  • Passport Size Photo-5 Copies for each director
  • Copy of Ration Card for each director.
  • Self attested copy of PAN of each director
  • Copy of Voter Id / Driving License / Passport of each director.
  • Copy of Bank Passbook with latest statement of each director.
  • Rental Agreement for office premises. if office taken on rent.
  • Copy of Corporation Tax Receipt / E.B. Card of the office.
If All Directors are Foreigners / NRI / other state have to appoint one local person as manager.
  • Passport Size photo (5 Copies of Manager).
  • Ration Card – copy of manager
  • Voter Card/ DL /Passport – Copy of Manager.
  • Bank statement latest of Manager.
Partnership Firm
  • Self certified - Partnership Deed
  • Self certified copy of Deed registration Acknowledgement
  • Self attested copy of PAN of Firm
  • Bank account details of Firm
  • Passport Size Photo-5 Copies for each Partners
  • Copy of Ration Card for each Partner
  • Self attested copy of PAN of each Partner.
  • Copy of Voter Id / Driving License / Passport of each Partner.
  • Copy of Bank Passbook with latest statement of each Partner
  • Rental Agreement for office premises. if office taken on rent.
  • Copy of Corporation Tax Receipt / E.B. Card of the office.
If all the partners are outside state have to appoint on local person as Manager
  • Passport Size photo (5 Copies of Manager).
  • Ration Card – copy of manager
  • Voter Card/ DL /Passport – Copy of Manager.
  • Bank statement latest of Manager.

Proprietorship
  • Self attested copy of PAN of individual
  • Bank account details of Individual
  • Passport Size Photo-5 Copies.
  • Copy of Ration Card
  • Copy of Voter Id / Driving License / Passport.
  • Rental Agreement for office premises. if office taken on rent.
  • Copy of Corporation Tax Receipt / E.B. Card of the office.
Different Rate of VAT / Sale Tax in Tamilnadu.
  • Good taxable at the rate of 1%
  • Goods taxable at the rate of 5%
  • Good taxable at the rate of 14.5%
  • Goods which have different rates as notified by Government from Time to Time
( Note: The rates vary from state to state)
Due date for Return

Every registered dealer needs to file returns for every month on the 20th day of succeeding

Set off of tax paid

VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods, other than special goods.

Exempted Sales

An exempted sale is a sale on which tax is not applicable and Input Tax Credit is also not available.

ZERO RATE SALE

Zero rate sale is a sale for which tax is not levied but the tax paid on local purchases is refunded to.
The Value Added Tax Act specified the zero rated sales as:

  • Export Sec.5(1)
  • Sale in the course of export [5 (3) of CST Act, 1956] (ie) Sale to Exporters
  • Sale to International organizations
  • Sale to SEZ
Compounding System of Tax
  • The dealers who do second and subsequent sale in the State. The Act provides tax at a rate of 0.5% as notified by Government for the dealers whose total turnover for a year is less than Rs. 50 lakhs.
  • The works contractors may opt to pay at compounded rates at 2% (civil), 4% (others) instead of paying tax at the rate prescribed for the goods involved.
  • The hotels, restaurants and sweet stalls may opt to pay tax at compounded rate prescribed in the Act at slab rates where total turnover is not less than Rs.10 lakhs but not more than Rs.50 lakhs. No Input tax credit is allowable to those dealers who have opted for compounded system.

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