VAT is a tax levied on sale of goods when any taxable commodities are sold to the consumer. It is an indirect form of tax which is paid to the government by customers but via seller of goods.
VAT is a multi-stage tax with the provision to allow 'Input tax credit (ITC)' on tax at an earlier stage, which can be set-off against the VAT liability on subsequent sale. Therefore, VAT is ultimately borne by the consumer. VAT is levied at every stage of sale/purchase of goods.
VAT Registration is mandatory in Gujarat for traders or manufacturers having a turnover of more than Rs.5 lakhs in a financial year. GVAT is collected and governed by the State Government of Gujarat.
The basic requirement of charging tax under GVAT Act is that where any sale/ purchase of taxable goods is affected by a dealer in the course of business, in the State of Gujarat, VAT is payable under GVAT Act.
Interest will be imposed in case of payment of GVAT.
URD purchase means purchase from a dealer not registered under GVAT. Input credit of URD purchase is not eligible.
ITC means VAT & Additional Tax paid by the dealer on purchases, purchase tax & additional tax u/s. 9 and Entry Tax.
In case of manufacturers, it is the tax paid on purchase of raw material for manufacturing taxable goods. The term raw material includes processing materials, consumable stores and packing material but does not include fuels for the purpose of generation of electricity.
Capital Goods means plant and machinery, (other than second hand plant and machinery), meant for use in manufacture of taxable goods and accounted as capital assets in the books of accounts.
ITC on capital goods can be availed subject to the following conditions
Dealers, engaged in trading activity and a class of notified manufacturers, being Bakery, Bricks manufacturers, having total turnover not exceeding Rs. 75 lakhs in the preceding year
Are treated as small dealers and can opt to pay lump sum tax on taxable turnover as under,
No, you needn’t to be available in person, GVAT registration process is online. A scanned copy of documents can be sent to us via mail, and we will handle the rest.