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Community Member
Posts: 46
Registered: ‎21-09-2009

Regarding VAT and CST registration

Hello everyone,

I have a few queries regarding CST and VAT registration. I would really appreciate it, if someone who is experienced would answer these queries.

1. Is it required to have CST/VAT registration if I am selling used items, such as old tape recorders, cd players etc?

2. I believe you need to have a CST/VAT registration for retail selling on ebay. Is this true?

3. I have checked around with some friends who are business men, and had informed me that the cost of registration for CST + VAT is Rs.30,000/- for partnership firm, which includes Rs.25,000/- as deposit, and Rs.20,000/- for sole proprietors, which include Rs.15,000/- as deposit. (The deposits are refundable upon de-registration). Is this accurate?

4. Another information I received regarding requirements to apply for VAT/CST is that, you need to have a business 'premise'. I do not know how exactly they define 'premise'. Can someone explain? Is the requirement of a premise applicable for e-commerce oriented businesses too?

Would appreciate an input from the pinks too, if you aren't too busy.

Thank you so much for your time and your answers.
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Community Member
Posts: 46
Registered: ‎21-09-2009

Regarding VAT and CST registration

in reply to anwarazad
PS: I forgot to include an important info, viz that I live in kerala, and the CST/VAT charge info I received is for kerala.
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Community Member
Posts: 46
Registered: ‎21-09-2009

Regarding VAT and CST registration

in reply to anwarazad
Any good hearted people around willing to help me out on this?
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Community Member
Posts: 2
Registered: ‎01-11-2009

Regarding VAT and CST registration

in reply to anwarazad
I need this information too, could someone please guide us?
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Community Member
Posts: 46
Registered: ‎21-09-2009

Regarding VAT and CST registration

in reply to anwarazad
Oook.. Since none of the ebay sellers were willing to help me and other newbies out.. I went ahead and consulted a CA. The information I received is as follows (This is for Kerala VAT and CST. I do not know if it holds true in other states too):

1. You do not need VAT or CST to sell used stuff, as long as it isn't your business to do so.

2. You need VAT and CST to sell anywhere, ebay or offline.

3. The cost of VAT+CST registration for kerala, is as follows:
Rs.500 for expected TO of over 5Lakhs and below
Rs.750 for expected TO of 5 to 10 Lakhs
Rs.1000 + (Rs.25 per Lakh above 10Lakh) for expected TO of 10Lakh to 50Lakh
Rs.2000 + (Rs.50 per Lakh above 50Lakh) for expected TO of 50Lakh and above.

In addition to the above fee, you also need to pay towards a safety deposit, which can be an FD, NSC or bank guarantee.

The amount for security deposit can be Rs.15000 or Rs.25000 depending on whether the business is a sole proprietary or partnership business vice versa.

This info is also found as per the Circular No.10 / 2006 found at keralataxes.in website.

4. VAT/CST requires a business premises, irrespective of whether the business is offline or online. This premise should be a one with its own house number. On application for the VAT/CST registration, their assessing authority will come to inspect the premises. Its not much of a big deal.

Additionally, I was advised that I need not apply for VAT\CST immediately. I was told however that it should be done within 6 months of beginning the business and/or before I reach 5Lakh TO. Also, should note that all transactions should be accounted, right from the very beginning, irrespective of whether you have a VAT/CST registration or not. Better hire an accountant to do the work for ya.

Hope this helps all newbie sellers on ebay. And hope to see more helpful seller coming forward to help the newbies.
(I do understand that competition is tight on ebay, and that is probably why the senior sellers won't help out the newbies. But, what fun is it without a good competition:smileyhappy: + it helps you grow )
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eBay Employee
Posts: 1,968
Registered: ‎24-03-2005

Regarding VAT and CST registration

in reply to anwarazad
Hi anwarazad,

This seems to be useful information. Thanks for sharing it!

I will tack this up so that more members can benefit from it in the long run.

Regards,
Sapana
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Community Member
Posts: 46
Registered: ‎21-09-2009

Regarding VAT and CST registration

in reply to anwarazad
Thank you very much Sapana.
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Community Member
Posts: 1
Registered: ‎09-11-2009

Regarding VAT and CST registration

in reply to anwarazad
Hey,
Thanks for asking and then sharing the info.Even i am a newbie to the ebay biz.
Great job!!!

Prachi
Gauhar-arts
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Community Member
Posts: 8
Registered: ‎30-12-2009

Regarding VAT and CST registration

in reply to anwarazad
Only Idiots and Fools will sell products in Ebay.in
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Community Member
Posts: 2
Registered: ‎01-01-2010

Regarding VAT and CST registration

in reply to anwarazad
Hello Anwarazad,

SEASONS GREETINGS

I too am new to the EBAY sellers and your information was very very helpful. This is really the true picture of what the community is all about. I, and surely, most of the members too, extend my heartfelt THANK YOU for the invaluabe info.
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Community Member
Posts: 207
Registered: ‎31-03-2005

Regarding VAT and CST registration

in reply to anwarazad
Hi,

Great to see this topic pinned on top of the Board.

Just a small bit of information.

As soon as a seller sells goods worth even Re.1/- to other state, he has to register for CST.

The exemption limit of 5 lakhs, etc. applies only when a seller is selling within his own state and does not need to be registed for VAT till he acheives a certain turnover.

Going by this logic every ebaY seller has to be registed with CST, not matter how much business he does.

ebaY should be asking for CST registration from all sellers before allowing them to sell on ebaY.

-------
Devesh
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Community Member
Posts: 1
Registered: ‎06-01-2010

Regarding VAT and CST registration

in reply to anwarazad
Yeah, almost ppl saying here are are right, but I advice ppl to wait till april becos GST a new Tax system to be introduced by which any seller registered can sell / buy any where in the country no need of central sales tax licences or Value added tax liscence no intra/ inter state seperate liscences required.. the system is a whole unique policy throught the nation... pls bear till april and then you can start a business new / used with a single liscence...
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rajelectroniks
Community Member
Posts: 1,562
Registered: ‎11-12-2006

Regarding VAT and CST registration

in reply to anwarazad
Deveshbhai,

There are many people selling on ebay who sell a few secondhand items interstate so you mean to say that even they will need CST for just 2-3 items per month, I don't think that info is correct, there will be some sales limit on CST too.
*************************
Regards.
Raj Electroniks.
*********************
rajelectroniks
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Community Member
Posts: 207
Registered: ‎31-03-2005

Regarding VAT and CST registration

in reply to anwarazad
Hi Raj,

You may consult your financial advisor or CA regarding this.

The law does not look at new or second hand products separtely.

If you are selling your own used goods, than CST registratoin may not be required but it is in the nature of trade, i.e. purhase and sale, than it will definately be required.

--------

Devesh
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rajelectroniks
Community Member
Posts: 1,562
Registered: ‎11-12-2006

Regarding VAT and CST registration

in reply to anwarazad
Deveshbhai,

In the Sales Tax Act of 1956 states that CST is applicable to a "Dealer" or "Trader" but what about a person who is not a Dealer or Trader by profession, what happens in his case ?.
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Regards.
Raj Electroniks.
*********************
rajelectroniks
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Community Member
Posts: 1,250
Registered: ‎09-04-2005

Regarding VAT and CST registration

in reply to anwarazad
Hello,

This Topic of Sales Tax Registration has been discussed a number of times on ebay.

It's true that you don't need to get registered if you are selling within your state and your Yearly Turn-over is less than 5 lakhs (this limit may vary from state to state).

But as Devesh rightly said that even if you sell an Item worth Re.1, you are liable to pay the Central Sales Tax.
(Since only Registered Dealers can collect CST, the Registration is compulsory for selling Items in another state)

But am really surprised that since ebay is the leading eCommerce shopping Portal in India and must be having a number of Chartered Accountants on their Payrolls. So why can't ebay give a clearcut reply to this question for the benefit of all the New members who are eager to sell on ebay .....

Is it legal to sell goods to someone in another state without having a CST registration ?

Hope this time ebay doesn't suggest us to consult our own Advocate / C.A and help the Community with a clear-cut reply on this question.

For ebay it's just a matter of 2 minutes to extract the correct information for the benefit of the Community so that the Sellers don't indulge in anything illegal ..... just because they are un-aware.

Who all would like to request ebay to provide us with this crucial information ? .


best regards

Umang Midha


IndConcepts logo7
.


best regards

Umang Midha


IndConcepts logo7
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Community Member
Posts: 1
Registered: ‎24-03-2010

Regarding VAT and CST registration

in reply to anwarazad
ebay says it will deduct 10% sales tax and 2 1/2% education cess which is included in the auction price so that means we have to loose this percentage. is it true?
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Community Member
Posts: 332
Registered: ‎14-01-2010

Regarding VAT and CST registration

in reply to anwarazad
Hi,
this information is for sellers from Delhi.
You dont need a VAT number for local sales (within Delhi) if your annual turnover is below 5 lacs. however, you must not charge VAT as well if your sales are below 5 lacs p.a.

If your sales are above 5 lacs p.a., then you need to get VAT number, you need to fill Form DVAT 06, along with a surety bond (of Rs 1,00,000)

If you intend to trade outside of Delhi, then you need to fill Form CST Form B. (along with DVAT 06)

Surety guidelines:-
1) Any registered trader with annual Sales Tax return of above Rs 1,00,000 (from consecutive 3 years) can become your surety
2) Your passport, property papers can also cut down surety amount.
3) If you are a woman application there is i believe 20% discount on surety.

this is as per last year when i applied for my VAT and CST.

total cost of getting a VAT + CST number is usually around Rs 5000.00. Which includes cost of hiring a tax consultant who will help you file the papers.

Hope this helps.

Regards buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC
buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC

Change is state of mind..but inevitable.
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Community Member
Posts: 332
Registered: ‎14-01-2010

Regarding VAT and CST registration

in reply to anwarazad
@Umang Midha
Umang, You can certainly sell outside of your city. however, you cannot bill them until you have a CST No.

Regards buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC
buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC

Change is state of mind..but inevitable.
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Community Member
Posts: 332
Registered: ‎14-01-2010

Regarding VAT and CST registration

in reply to anwarazad
By the way, thanks to Sheila Dikshit.Local VAT on Mobile phones has been increased. for mobiles costing upto Rs 9999.00 you will charge 5% VAT and for those costing 10K and above new VAT slab is 12.5%. this is for Delhi.
Correct me any one if i am wrong.

Regards buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC
buy genuine mobiles at unbeatable price.
http://stores.shop.ebay.in/Mobile-Phones-ETC

Change is state of mind..but inevitable.
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