Registration under VAT Act

3. Registration under DVAT Act

3.1 Compulsory, if: -

• Your turnover in the current year exceeds Rs. 10 lakhs(20 Lakhs from 2013) (manufacturer, traders, works contractor, hire-purchase business etc.) ; or
• You make any interstate sale; or
• You make interstate purchases for resale in Delhi
• You can also apply voluntarily for registration even if your turnover is below Rs. 10 lakhs.
• A single registration is enough for having more than one place of business in Delhi.

3.2 How to Register?

• Apply in Form DVAT 04 for registration under DVAT Act with the prescribed fee of Rs. 500/- and a security of Rs. 1 lakh. Fee is payable in the form of court fee stamps. If registration under Central Sales Tax is also required, apply in Form “A” also,with the fee of Rs.25/- in the form of court fee stamps.
• The security amount can be reduced by a maximum of Rs. 50,000/- if you can provide certain documents alongwith DVAT 04.  The security amount is reduced to the extent of amount mentioned against each head allowed for various documents is as follows:-
• Copy of last paid electricity bill(the bill should be in the name of the business and for the address specified as the main place of business in the registration form) Rs. 10,000/-.
• Copy of last paid telephone bill( the bill should be in the name of the business and for the address specified as the main place of business in the registration form) Rs. 5000/-
• Income Tax PAN, Rs. 10,000/-
• Proof of ownership of principal place of business namely sale deed/gift deed/partition deed duly registered with the office of Sub-registrar concerned - Rs. 30,000/-
• Proof of ownership of residential property by proprietor/managing partners namely sale deed/gift deed/partition deed duly registered with the office of Sub-registrar concerned - Rs. 20,000/- and
• A notarized copy of the passport of proprietor/managing partner or managing director-Rs. 10,000/-.
• Remaining security may be in form of cash (to be deposited in notified bank), FDR, Bank Guarantee, Post Office cash certificates, bonds, debentures, dealers surety or mortgage of immovable property.
• You are automatically registered within 15 days of submitting DVAT 04 and a Tax payer Identification Number (TIN) will be issued, to you. This TIN will be common for both DVAT as well as CST Act.
• If any discrepancy is found in your application or documents submitted along with it, a show cause notice in the form of DVAT-05 is issued within 15 days and reply of the same has to be submitted within 15 days of issue of such notice.
• If you fail to reply to the said notice or the reply is found not to be satisfactory, your application may be rejected and the same will be communicated to you in the form of Rejection Order.

3.3 Rights and Duties of a Registered Dealer:-

• To collect tax through a proper invoice and pay to us:
• To claim input tax credit;
• To file periodic returns; and
• To prepare and maintain proper records and books of accounts.

3.4 Voluntary Registration

• A Dealer not under compulsion may also obtain registration.
• By Obtaining Registration he will be able to issue tax invoice and pass on the credit of taxes paid by him on purchase of goods.

3.5 Cancellation of Registration

The Registration can be cancelled on:

• Discontinuance of business; or
• Selling of business;
• Shifting of a business from one location in other state.

3.6 TIN Registration Number

• It is a registration Number of the dealer and consists of 11 digits numerals.
• First Two Represent the State Code;
• Next Two digits will be check digits to ensure correctness of TIN’s
• The Remaining Seven digits will be used for Unique Identification of any dealer in the State.

3.7  Composition Scheme

As per the White paper Vat Act Should be so designed that high taxpayers should not be spread and the small dealers should be free from hassles of compliance procedures. Turnover of dealer should be with in Rs. 10 Lakhs to 50 Lakhs.

Dealers with limited turnover would have an option to pay a lump sum amount based on its total turnover at he specified rates as low as 0.25%.

However following sales are not eligible for the composition scheme of VAT Act, because other acts are applicable on them.

·         A Manufacturer or a dealer who sells goods in course of inter-state trade;

·         A  dealer who sells goods in course of import or export;

• A dealer transferring goods to branch;
• Any other activity on which Vat Act is not applicable.

3.8 Rates of tax under DVAT Act

The DVAT Act prescribes the following rates of tax on different types of goods:

• 1% Rate: Goods listed in the Second Schedule
• 5% Rate: Goods listed in the Third Schedule and the printing works contracts.
• 20% Rate: Goods listed in the Fourth Schedule.
• 12.5% Rate: Goods involved in the execution of works contracts except printing works contract.
• 12.5% Rate: Any goods not mentioned in the Second, Third and Fourth Schedules or in the First Schedule (exempted goods)
• Rates of 0.1%, 1%, 2.5 & 3% applicable for bullion traders, drugs and medicines traders and works contractors under composition scheme notified for them in accordance with the conditions mentioned in these schemes. Rate of 1% applicable to the dealers having turnover up to Rs. 50 lakhs and Rs.One crore in case of drugs & medicine dealers opting for the composition scheme in accordance with the conditions of the scheme.

To Download All the Forms of DVAT Click Here

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