A Value Added Tax (VAT) is a form of consumption tax or indirect tax which is imposed on goods and services at each stage of production starting from raw materials to final product. For the buyer, it is a tax on the purchase price and for the seller it is a tax on the value added to any product at each stage of its manufacture or distribution thereby avoiding cascading effect. The manufacturer remits to the government the difference between these two amounts, and retains the rest for themselves to offset the taxes they had previously paid on the inputs.
VAT applies to all provisions of goods and services except those that are zero rated or exempted and both natural persons and legal entities can get themselves registered for VAT.
Unlike sales tax, in VAT, there is provision for input tax credit or ITC.
VAT rules and regulations regarding registration, due dates of paying vat and filing return vary state-wise. FINMART through its various branches and associate offices in India can assist the client with VAT solutions ranging from Registration to return filings depending upon the state of the client.
In Gujarat the due date of depositing VAT with state government is 22nd of the succeeding month.
Filing of E-returns, or returns on quarter/monthly basis depends on individual cases.
Registration is a process of obtaining certificate of registration from the authorities under VAT Acts.
A dealer registered under the VAT Acts is called a registered dealer. Any dealer, who intends to carry on the business of purchase and sale of goods in the State and is liable to pay tax, cannot carry on the business unless he is registered and holds a valid registration certificate under the Act.
Dealer – A dealer means any person, who consequent to, or in connection with, or incidental to, or in the course of his business, buys or sells goods for consideration or otherwise.
All sales or purchase of goods made within the State except the exempted goods would be subjected to VAT.
Eligibility for registration in Gujarat -
Dealers whose gross annual turnover is above Rs. 5 lakh are required to get registered for VAT within 30 days from the date of liability.
The registration can also be cancelled under the following situations: