DVAT Registration

Delhi Value Added Tax or in short DVAT is a tax applicable on sale of goods within Delhi. Any person with turnover within Delhi exceeding Rs. 10,00,000 is required to be registered under DVAT and is liable to collect and pay DVAT tax to the Delhi Government. Further, any person purchasing or selling good from/to outside Delhi is also liable to be registered under DVAT in addition to registration under Central Sales Tax Act (CST).

A person can also apply for voluntary DVAT registration with or without CST even if he is not required take compulsory registration.

There are two types of DVAT registration i.e.

• Normal DVAT Registration
• Registration under DVAT Composition Scheme

DVAT Composition Scheme

DVAT Composition scheme is a easy version of DVAT introduced with DVAT Act for easy compliance by small businessmen. This scheme is applicable to small dealers only i.e. dealers with turnover less than Rs. 40 Lakhs (Rs. 40,00,000). Further, the dealer should only Purchase or Sale goods within the state of Delhi only. The salient feature of DVAT Composition scheme is given below

Applicability of DVAT Composition Scheme

• Turnover of Dealer should not exceed Rs. 40 Lakhs (Rs. 40,00,000)
• The dealer should exclusively sell / purchase goods within the State of Delhi

Terms & Conditions of DVAT Composition Scheme

• The dealer can purchase goods only from other Registered Dealers within Delhi only after payment of full VAT
• Composition Dealer cannot claim any credit of VAT paid on purchase of goods
• Composition Dealer cannot charge VAT to its customers on the invoice
• VAT liability of Composition Dealer shall be 1% of its total turnover

DVAT Registration Procedure

1. Prepare documents required for DVAT registration
2. Arrange for DVAT Surety (More Details Here)
3. File From DVAT 4 along with all documents and surety with DVAT Department
4. If also require CST registration file Form A along with DVAT 4
5. Get DVAT Registration Certificate along with TIN Number
6. Vat Inspector will visit your business premises within 15 days of TIN Registration

DVAT Registration Documents

The documents required for DVAT Registration are different depending on the constitution of the dealer i.e. weather the dealer is a Proprietorship, Partnership, Company or any other organisation. The documents required for DVAT registration for each different type of organisation structure is given below. Any documents required for reduction of DVAT Surety is to be given in addition to the documents mentioned below.

For Proprietorship

• Identity Proof of Proprietor
• 3 Photographs of Proprietor
• Address Proof of Proprietor
• Address Proof of Proprietorship
  • if self owned then copy of Electricity Bill / Property Tax Receipt / Sale Deed
  • if rented then NOC from Landlord, Rent Agreement, Electricity Bill / Property Tax Receipt / Sale Deed of Landlord
• Bank Account Details and Latest Bank Statement of Proprietorship
• List of Goods to be dealt in along with goods required for packing, if any

For Partnership

• Identity Proof of all Partners
• 3 Photographs of all Partners
• Address Proof of all Partners
• Address Proof of Partnership
  • if self owned then copy of Electricity Bill / Property Tax Receipt / Sale Deed
  • if rented then NOC from Landlord, Rent Agreement, Electricity Bill / Property Tax Receipt / Sale Deed of Landlord
• PAN Card of Partnership Firm
• Bank Account Details and Latest Bank Statement of Partnership
• Copy of Partnership Deed
• List of Goods to be dealt in along with goods required for packing, if any

For Company

• Identity Proof of all Directors
• 3 Photographs of all Directors
• Address Proof of all Directors
• Address Proof of Company
  • if self owned then copy of Electricity Bill / Property Tax Receipt / Sale Deed
  • if rented then NOC from Landlord, Rent Agreement, Electricity Bill / Property Tax Receipt / Sale Deed of Landlord
• Bank Account Details and Latest Bank Statement of Company
• Memorandum & Articles of Association
• Board Resolution
• List of Goods to be dealt in along with goods required for packing, if any

DVAT Surety

For DVAT registration it is compulsory to provide surety of Maximum Rs. 1,00,000 and Minimum Rs. 50,000 to the DVAT Department. The surety can be provided in various modes which are provided below, however, the more popular modes are either in way of Registered Dealer Surety i.e. where another registered dealer provides surety bond or Bank Guarantee. The method of determination of surety is also provided below.

Modes of Providing DVAT Surety

• Registered Dealer Surety
• Bank Guarantee
• Fixed Deposits
• Cash Deposit with DVAT Department

Determination of DVAT Surety Amount

The Surety for DVAT registration has been prescribed at Rs. 1,00,000. However, the same can be reduced to a minimum of Rs. 50,000 by providing the documents mentioned below. The amount of surety reduced is also mentioned against each document.

Reduction sought (Maximum reduction available Rs. 50,000)

1. Proof of ownership of principle place of business Rs.30,000
2. Proof of ownership of residential property by proprietor/ managing partner Rs. 20,000
3. Copy of passport of proprietor/ managing partner Rs. 10,000
4. Copy of Permanent Account Number in the name of the business allotted by the Income Tax Department Rs. 10,000
5. Copy of last 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
6. Copy of last 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. 5,000