Regarding VAT and CST registration

[anwarazad]

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.

[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.

[anwarazad]

Any good hearted people around willing to help me out on this?

[harunsk]

I need this information too, could someone please guide us?

[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:) + it helps you grow )

[sapana@ebay.com]

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

[anwarazad]

Thank you very much Sapana.

[gauhar-arts]

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

Prachi
Gauhar-arts

[expressions52]

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.

[veedeedirect]

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