VAT Registration

VAT Registration: Overview


VAT is an abbreviation for Value Added Tax. This type of tax is charged by the Central Government on the sale of goods and services when they are ultimately sold to the final consumers. Value Added Tax is charged and paid by the producers of the goods and services but it is finally levied on consumers who purchase the goods and services when they pay for them.


VAT Registration is made compulsory as well as important for all those manufacturers who are solely involved in the process of production of goods and services.  VAT Registration means the process of listing with the Government as a company eligible for the return of VAT. A person may get confused between VAT and sales tax since both taxes are related with the sale of goods and services. But sales tax is charged only once when the end user purchases the goods or services.  On the other hand, VAT is charged at different levels of production hence it is called a multipoint tax.
The VAT Registration Act has made it compulsory for all business organisations to get themselves registered for VAT payments. Nowadays, VAT Registration can be done online and it is becoming popular among business entrepreneurs since it is easy and time effective.


The important documents that are required at the time of VAT registration are as follows:

  • The Certificate of Incorporation of the Company which is applying for VAT registration
  • The Memorandum and Articles of Association
  • Details of the people involved with the company
  • Address proof of the director of the company
  • PAN card of the company
  • ID proof of the director of the company
  • Lease agreement of the company
  • Director’s passport sized-photograph

While applying for VAT registration, the company is also required to submit the following information:

  1. The dealer’s name
  2. The company’s name
  3. Postal address
  4. Telephone number
  5. Email id
  6. Details of the directors and the managing directors
  7. Nature of business
  8. Description of the commodity
  9. Authorized signatory’s details
  10. PAN number of the company
  11. Date of commencement
  12. Details of the bank account
  13. List of the directors
  14. Complete detail of the company


In India, Tax credit method is used for Vat assessment and collection. For different categories of products and services, the basic rate of value added tax ranges between 4% and 12.5%.

The basic steps that are required for the VAT registration procedure are as follows:

  • The VAT registration application must be filled with complete information and then submitted to the local VAT office along with all the documents required for the VAT registration.
  • After the submission of the application and the documents the local VAT office shall conduct an inspection of the premises of the company within three days after submitting the application form.
  • After the inspection has been made by the local VAT office, the relevant deposit fee needs to be paid.
  • After the payment of the relevant fee of the VAT registration, the TIN No. will be allotted and within a day the VAT certificate will be issued.

VAT registration can be done online. The online VAT registration process involves the following procedure:

  • Log on to your respective state’s VAT website and then click on the registration tab
  • Add the relevant information required as well as the necessary documents 
  • The company may even be allotted a temporary VAT registration number
  • After verification of the documents and the VAT registration application, the permanent VAT registration number is allotted to company.


The amount of fees that is required at the time of VAT registration is as follows:

  • VAT registration fees Rs.500
  • Professional tax Rs.1000 for sole proprietor, Rs.1000 for each partners of partnership, Rs.2500 for private ltd.
  • Rs.2000 for turnover of Rs.0 to Rs.2.00 lakhs
  • Rs.3000 for turnover of Rs.2.00 lakhs to Rs.10.00 lakhs
  • Rs.6000 for turnover of Rs.10.00 lakhs to Rs.25.00 lakhs
  • Rs.1000 for turnover of above Rs.25.00 lakhs.


  • Log on to the VAT registration website
  • Mention the VAT number of the company
  • The VAT status of the company and the dealer status will be provided to you subsequent to completion of the registration.


VAT Registration offers the following benefits to the company which are:

  1. Legally secured- If a company has VAT registration then there will be authenticity associated with the company and the business entrepreneurs would be more comfortable in carrying on their business. There would be a sense of being legally secured.
  2. Set off- The Company can easily set-off the difference of the VAT that has been given to the supplier and the VAT that the company received from the customers. VAT for a product has to be paid to the Government only once. So if the company has already paid VAT then it can deduct it from what the customers gave to the company.
  3. Clear image of the company- When the business turnover is more than Rs.5.00 lakhs, VAT registration is mandatory which gives a clear image about the company and helps define its image as an established company.
  4. Expansion of the business- VAT registration depicts the company to be more established and larger which helps appeal to more entrepreneurs and in turn helps in expansion of the company.
  5. VAT refund- VAT registration makes the company eligible for VAT refunds which it can claim against the taxes paid in the European countries if the company has purchased any assets from them.
  6. VAT status- When the company has completed VAT registration, it helps the company to check their VAT status online by using just the VAT number of the company. The benefit which the company gets is that there is no hassle in going through all the documents and receipts of the company to check when VAT was paid previously.
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