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VAT MECHANISM

In DVAT mechanism manufacture, whole seller or retail dealer charges taxes on sales. Dealer are allowed to book credit for tax already paid on purchase of material inputs and is required to pay only the net amount of tax to the government. Net tax payable by dealer is calculated by reducing amount of VAT paid at the time of purchase from the amount collect on sale. Net amount if payable, need to pay before 21st of next month i.e. due date for depositing amount of VAT.

DVAT REGISTRATION:

In Delhi state registration becomes mandatory under following circumstances-

  1. Turnover exceeds Rs. 20 lakhs
  2. Dealer makes interstate sale or purchase

The dealer needs to apply for registration of VAT within 30 days once turnover exceeds the limits. However, dealer may get registration voluntarily before reaching the limit.

DOCUMENT REQUIRED FOR DVAT REGISTRATION:

  • Scanned copy of PAN card no. (self-attested)
  • Scanned copy of Aadhar card (self-attested)
  • Bank account detail or scanned copy of cheque
  • 2 passport size photos
  • Mail id and Mobile no.
  • Proof of address-
    a) If rented- Rent agreement & utility bill like electricity bills, telephone bill etc. or NOC from
    landlord.
    b) If owned- House tax receipt
  • List of main item of business
  • List of top 5 items to be deal
  • Detail and proof of no. of number of additional places of business within or outside the state
  • Rubber stamp
  • Expected turnover
  • Additional document in case of partnership firm -
    a) PAN card of firm and all the partner
    b) Partnership deed
  • Additional document required in case of company-
    a) MOA and AOA
    b) Certificate of incorporation

DELHI VAT TAX RATE

SCHEDULE RATE EXAMPLE OF GOODS
SCH-I Exempt Meat, books, vegetable, Charcoal
SCH-I 1% Precious stone/metal, gold, silver, bullion
SCH-III 5% Computer, coffee seeds, utensils, bricks, communication equipment
SCH-IV 20% Liquor, lottery tickets, aerated drinks
General category 12.5% Electronics goods

COMPARISON OF SOME IMPORTANT GOVERNMENT REGISTRATION

VAT
Seller of goods can apply
When turnover exceeds by the amount specified by different State VAT Act (In Delhi it is 20 lakhs
State Government are the issuing authority
Monthly/quarterly/yearly depending upon state VAT rules
SERVICE TAX
Service provider can apply
When service provided or agreed to be provided exceeds 9 lakhs
Central Government are the issuing authority
Half yearly
SHOP & ESTABLISHMENT ACT
All
Within 30 days of operation (may differ municipal to municipal)
Municipal corporation are the issuing authority
No return need to file
IMPORT EXPORT CODE
Person engage in import & export of goods can apply
Before making import & export of goods
Director General of Foreign Trade are the issuing authority
No return need to file
PROFESSIONAL TAX REG
Employers can apply
Within 30 days of operation (may differ state to state)
State Government are the issuing authority
Monthly/quarterly/yearly depending upon state government rules

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