Page 247 - DCOM308_DCOM502_INDIRECT_TAX_LAWS

Indirect Tax Laws

Notes Any dealer whose turnover exceeds the specified limit as prescribed by the state is liable to pay
tax. The turnover will be considered on the total turnover of sale and purchase. It will be levied
in the event of any sale or purchase.

Registration

Registration is the process of obtaining certificate of registration (RC) from the authorities
under the 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.

Eligibility for Registration

As per the provisions contained in the White Paper, registration of dealers with gross annual
turnover above 5 lakh will be compulsory. There will be provision for voluntary registration.
All existing dealers will be automatically registered under the VAT Act. A new dealer will be
allowed 30 days time from the date of liability to get registered. An application for registration
should be made to the VAT Commissioner.

The White Paper specifies that registration under the VAT Act will not be compulsory for the
small dealers with gross annual turnover not exceeding 5 lakhs. However, the Empowered
Committee of State Finance Ministers subsequently allowed the States to increase the threshold
limit for the small dealers to 10 lakhs with the condition that the concerned State would bear
the revenue loss, on account of increase in limit beyond 5 lakhs.

Generally, 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 a consideration or otherwise.

All sales or purchases of goods made within the State except the exempted goods would be
subjected to VAT.

Compulsory Registration

If an assessee fails to obtain registration under the VAT Act, he may be registered compulsorily
by the Commissioner. The Commissioner may assess the tax due from such
Service Tax & VAT: Person on the basis of evidence available with him. In this event the assessee
shall have to forthwith pay such amount of tax. Further, failure to get registered shall result in
attracting default penalty and forfeiture of eligibility to set off all input tax credit related to the
period prior to the compulsory registration.

Voluntary Registration

A dealer otherwise not eligible for registration may also obtain registration if the Commissioner
is satisfied that the business of the applicant requires registration. The Commissioner may also
impose any terms or conditions that he thinks fit.

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