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.

[metneurobion]

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...

[rajelectroniks]

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.
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Regards.
Raj Electroniks.

[veedeedirect]

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

[rajelectroniks]

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 ?.
*************************
Regards.
Raj Electroniks.

[indconcepts]

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

[amardagr8]

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?

[mobile-phones-etc]

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

[mobile-phones-etc]

@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

[mobile-phones-etc]

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

[avinash_gupta_bid]

@anwarazad

Thanks for the info on CST+VAT.

"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."

If we don't have VAT CST Numbers then how can we ship consignments? Because the shipper will require papers and invoice for the materials being sent? So how can we keep running the business for 6 months or so.