Applicablility of VAT and CST

[Guest]

Dear Learned members,

This is with respect to the captioned subject.

In this regard, please take a note of the below mentioned facts of my case.

We have recently incorporated an LLP with our main business as manufacturing control panel and our place of business and registered office is in Gujarat. Further we have not started any business and very recently we have got our first order from a textile company based in Delhi.

Hence, order to manufacture control panel we require a few electronic items such as electric relays an other stuffs.

Hence I've identified two suppliers, one from Mumbai and another from Hyderabad to supply me the required items.

But both of them asking my CST or VAT(TIN no ) registration no in order to supply me the items.

Hence my query is that even though I've not crossed the threshold limit of 500000 lacs turnover for registration under VAT, do I still need to get registered under these taxes.

Plss help me because as of now nobody is ready to supply me any items.

[YAGAY andSUN]

In our view, you may opt for voluntary registration even if you have not crossed the threshold limit. There is no harm in it.

[Ganeshan Kalyani]

The suppliers are asking for CST No. To ensure that you are registered and you will be able to issue them the Form C which is for concession of rate of tax. In absence of such form the VAT department in the jurisdiction of suppliers location would demand full tax applicable by treating the interstate sale as local. In such case you are left with two options either to pay the tax at full rate or apply for registration. Thanks.

[Guest]

Thank you all for your reply and helping me to understand this in a simple way.

AI Summary

New LLP Opts for Voluntary VAT Registration to Secure Tax Benefits on Interstate Supplies Under Form C A newly incorporated LLP in Gujarat, focused on manufacturing control panels, received its first order from a Delhi-based textile company. The LLP needs electronic items from suppliers in Mumbai and Hyderabad, who require the LLP's CST or VAT registration number to proceed with the supply. Despite not reaching the turnover threshold for mandatory VAT registration, the LLP is advised to opt for voluntary registration. This would allow them to issue Form C for tax concessions and avoid paying full tax rates on interstate sales. The LLP expressed gratitude for the guidance received.