• Is CST/VAT required for sole proprietor selling online only

Dear Sir/Mam

I am wiling to start a business of online selling goods (no offline selling) is it necessary to get a CST/VAT registration in starting of my business? Within what time should I get my registrations from the start of my business?
Asked 10 years ago in Business Law

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9 Answers

VAT registration is required for any business that is into sales either by way of trading, manufacturing etc. VAT registration is required for any business that is into sales either by way of trading, manufacturing etc. The units may to Proprietary, Partnership, Private Limited as the case.

The documents that are required to submit for company a are as below:

Proprietary company:

1. Application in VAT (Form 1).

2. Additional for CST registration (Form A).

3. Professional tax registration (Form 2).

4. Copy of the rental agreement of the business place.

5. Copy of the address proof, ID proof of the Proprietor / Partner / Director.

6. Four PP size photographs of Proprietor / Partner / Director.

7. PAN No. & Bank Account No.

8. Details of business activities.

Additional Documents for Partnership:

1. Partnership deed

Additional document for Private Limited:

1. Memorandum of Association and Articles of Association.

Procedure:

1. The application alongwith the documents to be submitted to the functional local VAT office.

2. Local VAT Office shall conduct an inspection of the premises within three days after submitting the application, after inspection the relevant deposit fee to be paid.

3. On payment of the Professional fee deposit the TIN No. will be allotted and Certificate will be issued within a day.

Fee structure:

1. VAT registration fee Rs.500

2. Professional tax Rs.1000 for Proprietor, Rs.1000 for each Partners for Partnership, Rs.2500 for Private Limited / Limited.

3. For turnover of Rs.0 to Rs.2.00lakhs - Rs.2000/-

Rs. 2.00 lakhs to Rs.10.00 lakhs - Rs.3000/-

Rs.10.00 lakhs to Rs.25.00 lakhs - Rs.6000/-

Above Rs.25.00 lakhs - Rs.10000/-

Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultation

Hello,

It is absolutely necessary to have a CST/VAT registration done regardless of the nature of business.

You must do so within 30 days of starting of your business.

S J Mathew
Advocate, Mumbai
3595 Answers
175 Consultations

1.yes.

2.within 1 month.

R.K. Nanda
Advocate, New Delhi
457 Answers

1) VAT registration is required if you are buying or selling taxable goods

2) Submit an application for VAT in Form 1 along with the following documents to the local VAT office:

• Central Sales Tax registration certificate(Form A)

• Professional tax registration certificate(Form 2)

• Copy of important documents such as the address proof, ID proof of the Proprietor

• Four PP size photographs of the Proprietor

• PAN No. & Bank Account No of the Proprietor

• Copy of the rental agreement of the business place

• Details of business activities

ii. The authorities from the local VAT office will inspect the premises of where you conduct business within a prescribed time

iii. Once the inspection is over, you will have to pay a specified fee to the local office for your VAT registration

iv. On payment of the fee, a TIN number will be allotted to you for your business and you will also be given the VAT registration Certificate.

3)you are only required to register for VAT if its turnover for sales of goods is above Rs. 5 lakhs (Rs. 500,000).

Ajay Sethi
Advocate, Mumbai
96957 Answers
7823 Consultations

For any bussiness you need to do vat registration or take pan card in the name of company and take vat later. But you will be bound to pay it

Jeshma Mohandas KP
Advocate, Kozhikode
567 Answers
1 Consultation

1) At the outset, you need to decide the form and structure of the proposed business i.e. whether proprietorship, partnership, company, etc.

2) You have to use a unique name (not used by any other business) and get it registered and protect the Intellectual Property Rights e.g. copyrights, trademarks, etc.

3) The registration of proprietorship and partnership firm is optional while it is compulsory for a company,

4) For online business, you need to have your own website with unique domain name which needs to be registered and hosted on a server,

5) You should have a dedicated 24x7 customer helpline for redressal of grievances,

6) You need to have RBI approved Payment Gateway,

7) You should have the services of a dedicated courier for delivery of products to customers,

8) You require physical location and license under Shops and Establishment Act,

9) Of course, there needs to be bank account in the name of the business. A current bank account is as good as a "proprietorship concern".

10. VAT is a multi point levy where the tax paid on local purchases from the registered dealer can be set off against the tax payable on the sale of goods, other than special goods. VAT, as the name suggests means value added tax. Any act which result in increasing the value of the product attracts VAT...value addition. There are a number of taxes you need to pay, VAT, Service Tax, Excise Duty, Sales Tax, etc depending on the products to be sold by you and whether the products are imported or not.

11. Liability for registration is fastened to the following category of persons:-

a. Those dealers whose total turnover in respect of purchase and sales in the State is not less than Rs.10 lakhs for a year are to get registered under the Act.

b. The other dealers whose total turnover for a year is not less than Rs.5 lakhs shall get registered.

c. Casual Traders, agent of non-resident dealer and dealers in jewellery irrespective of quantum of turnover shall obtain registration.

d. Those dealers who intend to commence the business, on option, may obtain registration.

12. The registration fee is different in different states. For additional place of business separate fee is charged in addition to principal place of business. The registration number allotted to the dealers is popularly known as TIN i.e. Taxpayer Identification Number. This is a eleven digit number to be quoted in all VAT transactions and correspondence

13. Last but not the least, you need a contract to be listed on your website. The rights and liabilities of you and your customers will be governed by this contract. It is always advisable to get this crucial document drafted by your lawyer to enforce your rights.

Ashish Davessar
Advocate, Jaipur
30776 Answers
972 Consultations

1)yes you can register for VAT later . as mentioned earlier if your turnover exceeds Rs 5 lakhs you would need VAT registration .

2) you would need to obtain PAN card in name of proprietory concern to open a bank account

3)you would have to furnish surety in prescribed format for purpose of proper payment of value added tax to indemnify govt against loss that may be caused for failure to pay tax within prescribed period

Ajay Sethi
Advocate, Mumbai
96957 Answers
7823 Consultations

1. You will negotiate regarding the sale online but you shall have to physically deliver the goods to your clients,

2. If you are to deliver also the goods then you shall have to have an off line business set up with all business requirements like Bank A/c, S.T Registration no., Shops and estavlishment registration no etc,

3. Afte starting the business and attaining some turn over, you can apply for VAT and other S.T. registration,

4. Open the Bank account first.

Krishna Kishore Ganguly
Advocate, Kolkata
27460 Answers
726 Consultations

1.yes, u need guarantee for vat/cst registration.

2.yes, u can register for vat later but pan card is must.

R.K. Nanda
Advocate, New Delhi
457 Answers

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