Libility of obtaining VAT registration in Gujarat

[Jignesh Shah]

As per Act says: "whose total turnover during the year immediately preceding the appointed day exceeded rupees five lakhs and whose taxable turnover exceeded rupees ten thousand in a year (the aforesaid amounts of total turnover and taxable turnover are hereinafter referred to as “thresholds of turnover”) One of our client (i.e. ABC Ltd.) doing business of providing House Keeping Service to corporates (XYZ Ltd.) (provide house keeper with material) Process is like this: Purchase the HK material in the name of ABC Ltd. and use that material in XYZ premises. ABC Ltd. raise two types of bills 1) Charges for House Keeper (HK salary charges) 2) Charges for HK material (i.e. 1 Rs. per sq. ft.) Turnover of ABC Ltd. would be cross the said limit (Five Lac) within one month. Now the question is ABC Ltd. is not going to sell the particular material to XYZ Ltd. Hence, Is ABC Ltd. liable for obtaining VAT registration or not? As it is a key question, can I expect a definite answer to this? Thanks.

GVAT will Applicable in your case. Notf. Dtd. 31/03/2006 GHN-23VAT2006/S.2(23)(1)-TH Schedule Entry No. 15.

NILESH GAJJAR

[email protected]

AI Summary

VAT registration required where provision of housekeeping services with material charges causes taxable turnover to exceed thresholds.
Provider of housekeeping services supplying materials and separately billing labour and materials will trigger VAT applicability when the enterprise's turnover exceeds statutory thresholds; the advisory response cites a state VAT notification and schedule entry to support that such supplies require VAT registration and accounting for the taxable component.