VAT, or Value Added Tax, is a tax imposed by the government on the sale of goods and services to end-users. Producers of goods and services charge and pay VAT, but it is ultimately levied on consumers who buy those goods and services. All business organizations and manufacturing entities must be registered under the country’s VAT registration act to pay VAT annually. This is of utmost importance because VAT registration is required for MSME registration, MSME loans, etc.

What is the meaning of VAT registration?

VAT registration, also known as a TIN, is a necessary and crucial activity for all merchants and enterprises involved in the production or sale of goods and services.

VAT is comparable to sales tax. However, it differs from sales tax in that it is only collected once throughout the purchase process. VAT registration may be completed online and is far more convenient than previous ways, which is one of the reasons it has become so popular among enterprises.

Learn more about VAT and other MSME registration requirements at Ziploan to start your MSME journey efficiently.


VAT Registration Procedures

The VAT registration process is straightforward; however, there may be slight variances across states. In India, the tax credit technique is used to calculate and collect VAT. For various categories of products and services, the base rate of value-added tax ranges from 4% to 12.5 percent.

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The following are the basic steps involved in the VAT registration process:

  • The VAT registration application and the appropriate documentation must be filled out and sent to the functioning local VAT office for VAT registration.
  • Within three days of filing the application form, the local VAT office will examine the company’s premises.
  • The applicable professional fee deposit charge must be paid when the local VAT office has completed the inspection.
  • The TIN No. will be assigned when the fee deposit is paid, and the VAT certificate will be provided within a day.

What is the procedure for registering for VAT online?

With revolutionary technology registering for VAT, MSME registration, taking MSME loans has become efficient and easy. The steps to register for VAT online in India are as follows: 

  • Go to the website for your state’s VAT and select the registration tab.
  • As a request for your firm, fill in the essential information and attach the relevant papers.
  • A temporary VAT number may be assigned to the business.
  • After the papers are verified, and the VAT registration application is completed, your firm will be assigned a permanent VAT registration number.
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Required Documents for VAT Registration

The following are the primary documents you’ll need to submit with your company’s VAT registration:

  • Certificate of Incorporation (in case of Companies)
  • In the case of corporations, the Memorandum of Association (MoA) and Articles of Association (AoA) are used.
  • Details about the firm’s employees.
  • Address evidence for the company’s director – Lease / Rental Agreement
  • PAN In the event of a proprietorship, the company card/individual PAN card is required.
  • A copy of the company’s director’s ID is required.
  • Company / Proprietorship Rental/Lease Agreement.
  • In the event of a partnership firm, the partnership deed is used.
  • Photograph of the firm’s Director in passport size.
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A corporation must additionally provide the following papers as part of the VAT registration process:

  • Name of the Dealer
  • Company’s name
  • Postal Address
  • Telephone number
  • Email id
  • Director/Managing Director/Partners/Proprietor Information
  • Authorized Signatory’s details
  • Pan number of the company
  • Date of Commencement of Business
  • Nature of Business
  • Commodities description
  • Bank Account details
  • List of Directors (in case of Companies)

How can I check the status of my VAT registration?

  • Simply visit the VAT registration page.
  • Please provide your credentials or the VAT number if you have one.
  • As a result, you will be informed of your VAT status and dealer status.

The Advantages of VAT Registration

Your business will get several benefits from VAT registration. Here are a few examples:

  • Legally protected – Applicants will receive a VAT registration number, and if a firm has a VAT registration number, it will be authenticated, which will make your MSME registration legal. This gives the company a greater reputation, and other business owners will feel more confident in carrying on their operations and getting loans. In a word, the organization will be legally protected and will project a professional and trustworthy image.
  • You can take advantage of Set-off – The corporation may simply employ the set-off, which is essentially the difference between the VAT paid to the supplier and the VAT paid by the customers. As a result, a product’s VAT must be paid to the government only once, and if the firm has previously paid VAT, it can deduct it from the money received from customers.
  • The company’s image is well-established – VAT registration becomes obligatory when the business turnover exceeds Rs.5.00 lakhs, according to the legislation, and it provides a clear picture of the organization and helps define its image as an established company. As a result, the firm can expand by attracting other entrepreneurs.
  • VAT refund – Once a firm has registered for VAT, it can get VAT refunds for taxes paid in European nations if products and services were acquired there.
  • VAT status – If your business is VAT registered, you may quickly check its VAT status online by entering the company’s VAT number. The firm’s benefit is a smooth experience when looking through all of the company’s paperwork and invoices to determine when the VAT was previously paid.
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If you’re just starting as a small business, VAT registration might benefit MSME registration, MSME loans, etc. Keep in mind that you will need to keep proper records and complete VAT returns regularly.  

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FAQs – Vat Registration Online

What is VAT, and what does it mean?

VAT stands for Value Added Tax, and it was created to replace the Sales Tax. It is a levy tax with many stages.

Who is required to file a VAT return?

According to the regulations of each respective state, every trader/manufacturer or firm that is either involved in manufacturing or selling items is required to register for VAT if their annual turnover is five lakhs or ten lakhs.

Is it possible to verify the progress of your VAT registration online?

Yes, you may check the progress of your VAT registration online by going to the official website and entering your credentials/temporary VAT number.

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