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.

AI Summary

ABC Ltd.'s Liability for VAT Registration Due to Turnover Exceeding Five Lakhs; Notification 31/03/2006 Applies A query was raised regarding the liability of ABC Ltd. for VAT registration in Gujarat, as their turnover is expected to exceed five lakhs within a month. ABC Ltd. provides housekeeping services to XYZ Ltd., including purchasing materials in ABC Ltd.'s name and using them at XYZ's premises. They issue two types of bills: one for housekeeping salary charges and another for material charges. The question was whether VAT registration is required since the materials are not sold to XYZ. The response indicated that VAT is applicable, referencing a notification dated 31/03/2006.