Entrepreneurs generally do not have any idea about legal terms such as VAT or CST or TIN Number. Everyone nowadays talks about the economic development of a country; tax is an essential component for an economy. It is a hinge around which the economy of a country revolves. But, the irony lies in the illiteracy of people regarding this important factor of any economy. Everyone should have the basic knowledge of TIN/ CST/ VAT.
The registration of Value Added Tax (VAT) is a must for business trading or manufacturing goods in India, just as important as using the forex pullback strategy for business success. It has replaced Sales Tax registration in India and is considered synonymous with CST Registration and TIN Registration. It is considered as a multi- stage tax which contains the provision to allow ‘Input tax credit (ITC)’ on tax at an earlier stage, which than can be appropriated against the VAT liability on subsequent sale. So, it can be said that VAT is ultimately borne out by the consumer himself. It is levied on the sales of goods collected and governed by the State Government, so each of the State Governments has different rules applicable thus for their State based on the type of good manufactured or sold out. Therefore, it is important for any business which is involved in the manufacturing or trading of goods to check the VAT rates applicable for the goods that they are selling in their state following the relevant regulations.
In most states of India Vat Registration is mandatory for traders or manufacturers having a turnover of more than Rs. 5 lakhs per year and some states have kept the turnover limit of Rs. 10lakkhs per year. Hence, the manufacturers or traders should be aware about the respective state’s VAT regulation and thus, obtain registration as per the requirements.
When the registration of the VAT is completed they are provided with an eleven digit distinct number which will thus be the VAT number/ TIN number/ CST number for the business. VAT/ TIN/ CST use the same distinct 11 digit number. Hence, VAT / TIN / CST are the same and obtaining VAT Registration from the State authorities will be termed as the TIN or CST Registration also.
In case of Proprietary Firms, LLPs or Partnership Firms VAT Payments must be deposited in a designated bank quarterly and it has to be made monthly in case of other type of business entities like Companies. It is not applicable for goods exported from India. Therefore, exporters of goods are not required to pay this tax. However, then also they should obtain VAT registration
TIN stands for Taxpayer Identification Number. It is used alternatively with VAT (Value Added Tax) number only when it used for intra state sales. In most of the states TIN number is required when the turnover crosses Rs. 5 lakhs annually but sometimes even it is necessary to have this number from the beginning. For Ex- Dealing with ecommerce business like Flipkart or Snapdeal or Paytm or Amazon requires TIN number from the very beginning.
Each State has its different rules and regulations for issuing Tin Number but there are some general documents which are necessary for the TIN Number or VAT/CST –
- Personal ID Proof like PAN Card Copy which is mandatory for registering any type of the business.
2. Personal Address Proof like Aadhar Card Copy or Voter Id or Passport Copy or Driving License.
3. Firm Address Proof like Utility Bills Copy as Elect Bill or Gas Bill or any Rent Agreement Copy or any Sale Deed Copy.
The procedure to apply for TIN Number in India is as-
- Firstly find the respective State Government’s VAT Department Website.
- In most of the states the initial procedure is online through the website so one has to create a unique login ID on the VAT Portal.
- After creating login id fill up the application with basic details and upload the basic documents which is mentioned as per requirements.
- After the Filing the application, respective application is verified by the officer and he issues a provisional certification and TIN Number.
- After issuing the provisional TIN Number Government department officer visit the premise and verify the location of the premise and then issues final Certification.
Hence, this is the common procedure to apply for the TIN Number in India. Still, there are different provisions of different states. In some states, the TIN number can be applied on the residential address but in some states during the VAT Inspector Verification the application on the residential premise is generally cancelled. Even Tin Number can be applied without registration of a firm or the name of the firm as a Sole Proprietorship Firm by directly applying for TIN Number and by opening a current bank account on the TIN Certification Basis. It is also necessary that proper returns are to be filed. The security deposit is refundable if one cancels the registration. Thus, this is the simple procedure to register for the Tax Identification Number.
TIN stands for Taxpayer Identification Number, This is a unique number allotted by Commercial tax department of respective State. This eleven digit number is to be mentioned in all VAT transactions and correspondence. This number is used to identify dealers or traders registered under Value Added Tax (VAT). The general knowledge of Tax Identification Number will help in the development of the Indian economy. The people should have the idea about this and then only they will be able to contribute towards the country’s development.
Author: This blog is written by Ms. Harshita Tomar, Raipur, a passionate blogger & intern at Aapka Consultant.
OUR SERVICES
Company Registration I Trademark I Copyright I Patent I GST I MSME
ISO Certification I Website/App Policy I Legal Documentation
Annual Compliance I Connect Consultant
Visit: Aapka Consultant to get Online Services of CA CS & Lawyers.
Read also: 4 Bitcoin Startups That Shut Down – DC Forecasts – Leading Digital Currencies.
