Is VAT required for a small sale ?

[Kishan Barai]

Respected Sir/ Madam, Reg. in VAT is costly for a new start up people. If his turnover is less then 300000 INR in a year. Can he issue a bill without a VAT & do a business legally ?

For eg. A person import goods of 50,000 & pay import duty now to sale those goods in india he req. VAT in Gujarat or other state to sell legally with bill. So can he sell & make bill without VAT number in India ?

Thank you in Advance.

[Ganeshan Kalyani]

If the turnover is going to cross the exemption limit then it is better to get registered under VAT / CST. By registering you will be eligible for Input Set off. By not registering the input paid on purchase becomes your cost. However if you wish not to register then you need to check the respective States VAT Act about the criteria for registration. Thanks.

[Kishan Barai]

Thank you very much for a reply.

But the issue is I am not able to find the limits for reg in VAT in Gujarat. Only I get response from experts is VAT reg. is mandatory to sell goods locally in India.

https://commercialtax.gujarat.gov.in/vatwebsite/home/home - js p

I have also send email to them.

The problem is reg. in VAT cost 50,000 Approx. (25,000 Gov Deposit) in Gujarat. So it is costly for a new business man having no turnover.

[Ganeshan Kalyani]

Refer Section 21 and 22 of Gujarat Value Added Tax Act which deals with compulsory and voluntary registration under the Act. If the taxable sale crosses ₹ 10K or total sales crosses ₹ 5 lacs then registration is compulsory. Even if you choose to get registered under VAT voluntarily the deposit so paid is eligible for set off against future VAT liability under GVAT. Thanks.

[Kishan Barai]

Thank You Very Very Very Much..........

AI Summary

VAT registration triggers input tax credit eligibility and affects ability to issue compliant VAT invoices in taxable trade.
Registration under the state VAT regime is required where statutory thresholds for taxable sales or total turnover are met; non registration bars entitlement to input tax credit, making input tax an unrecoverable cost. Voluntary registration is available and any deposit required by the state may be set off against future VAT liability. Consult the state VAT provisions on compulsory and voluntary registration to determine whether registration and compliant VAT invoicing are legally required before trading without a VAT number.