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VAT Registration

What is Value Added Tax (VAT)?

It is a form of indirect tax and is in the nature of multi-point sales tax. In India, it is the replacement of existing sales tax structure; the only difference is manner of levy.



Who is a person liable to pay tax?

Any person who, for the purposes of or consequential to his engagement in or in connection with his business, buys or sells goods directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes.

A factor, commission agent, broker, delcredere agent or any other mercantile agent.

A non-resident dealer or his agent.

An auctioneer.

A club, association, society and co-operative society.

Casual trader.

Any person who disposes any goods as unclaimed or confiscated, or unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale.

Banking and insurance companies, if they buy, sell or supply goods.

Transactions liable for tax under the DVAT Act Sale [Section 2(1)(zc)]

The term "sale" in DVAT Act covers the following transactions in its ambit:

Transfer of property in goods by one person to another.

Transfer of property by auctioneer, banks and insurance companies.

Transfer of goods on hire purchase or other system of instalments.

Supply of goods by a society (including co-operative society), club, firm, or any association to its members.

Transfer, otherwise than in pursuance of a contract, of property in any goods.

Work contract transactions.

Leasing Transfer of right to use goods.

Supply, by way of or as part of any service or in any other manner, of goods, being food or any other article for human consumption.

Every disposal of goods as unclaimed or confiscated, or unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products.

Compulsory Registration

Every dealer is required to apply for registration under this Act if:-

Section, Circumstances, Taxable Quantum (Rs.)

16A(7) - Casual trader as defined u/s 2(1)(g) - NIL

18(2)   - Dealer who imports any goods for sale in Delhi - NIL

18(2)   - Any other dealer - 20,00,000.00

In case of dealers who are engaged in works contract activities, taxable quantum means the gross turnover, that is, the turnover before deducting there from amount of labour and services.



In accordance with section 18(3) of the Act, taxable quantum of a dealer shall not include turnover from:-

Sales of capital assets.

Sales made in course of winding up of dealer's activities.

Sales made as part of the permanent diminution of the dealer's activities.

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