Registration under MVAT Act, 2002

INTRODUCTION OF MVAT ACT, 2002

¨The Maharashtra Value Added Tax 2002 (Herein after called as MVAT Act) has replaced the Bombay Sales Tax Act, 1959 on & w. e. f. 1st April 2005 and now the sales tax is collected by the Maharashtra Government under MVAT Act, 2002. Up to 31st March 2005 the sales tax was collected under the Bombay sales Tax Act, 1959

INCIDENCE AND LEVY OF MVAT

¨As per the provisions of MAHARASHTRA VALUE ADDED TAX ACT, 2002 (MVAT), a dealer is liable to pay tax on the basis of turnover of sales within the state.

DEALERS LIABLE TO PAY TAX (SEC 3)

1.The dealers holding a valid registration certificate under the earlier laws, whose turnover of either sales or purchase exceeds the specified limits during the F.Y 2004-05.

2.The dealers holding a valid registration certificate under the earlier laws, whose turnover of either sales or purchases has not exceeded the specified limits during the F.Y 2004-05, but who have opted to continue their registration certificate.

3.New dealers whose turnover of sales exceeds the prescribed limits during any year, commencing on or after 1st April 2005.

4.A successor in business of any dealer shall become liable to pay tax on and from the date of succession.

5.A dealer applying for voluntary registration.

1. The Maharashtra Tax Laws( levy, Amendment and Validation) Act, 2012, provides for liability of certain dealers to pay tax on the basis of turnover of purchases (of specified good sin newly inserted sections 6A and 6B).

Why to obtain Registration Certificate? 

• Obtaining of registration certificate is statutory obligation of every dealer, who is liable to pay tax under the Act.
• It empowers the dealer to collect tax.
• A registered dealer gets the benefits of set off (input tax credit)
• Business without registration invites penalty/prosecution.

Who should apply for the Registration?

¨The dealer who attains or crosses prescribed turnover of purchase or sale should apply for registration under VAT Act within 30 days from the date on which turnover crossed the  prescribed limit.

¨Once a dealer exceeds the prescribed turnover and fulfils the conditions as mentioned in table below, then the liability to pay taxes under the Act commences from the time of transaction by which the turnover exceeds the prescribed limit.

What happens if not applied in time for registration?

¨When a dealer does not apply within 30/ 60 days from the date of exceeding the prescribed turnover of purchases or sales than certificate of registration will be issued with effect from the date of uploading of the application. Therefore, from the date of starting of business till the date of uploading of the application, the dealer will be treated as unregistered.

¨Penalty for un-registered dealers: If dealer does not apply in time and remains unregistered, it is an offence under the Act.

REGISTRATION [ SEC.16, R 8 ]

¨Every dealer who becomes liable to pay tax under the provisions of MVAT , shall apply electronically for registration to the prescribed authority, in form 101, within 30 days from the date of such liability.

TIME LIMIT TO APPLY FOR REGISTRATION

TYPES OF REGISTRATION	TIME LIMIT
Exceeding prescribed turnover limit	Within 30 days from date of exceeding turnover.
Change in constitution	Within 30 days of such change.
Transfer of Business	Within 30 days of such transfer.
Transfer of Business by way of succession in case of death	Within 60 days of such incidence.

TURNOVER LIMITS FOR THE PURPOSE OF LIABILITY/ REGISTRATION [SEC.3(4) ]

CATEGORY OF DEALER	TURNOVER (w.e.f. 01/05/2012)	TURNOVER OF TAXABLE GOODS PURCHASED OR SOLD
IMPORTER	1,00,000	10,000
OTHERS	10,00,000 (w..e.f. 26/06/2014)	10,000

TURNOVER FOR THE ABOVE PURPOSE

¨Section 3(5) – Following items specifically covered for registration limits:

¤Turnover of all items, whether taxable or tax free is to be considered.

¤To include turnover on own account as well as on accounts of principal, whether disclosed or not.

¤In case of auctioneer turnover should include turnover of goods, price of which is received by him.

¤In case of agent of non-resident dealer, sales of such non resident dealer.

DOCUMENTS REQUIRED FOR THE PURPOSE OF REGISTRATION

A. IN CASE OF FRESH REGISTRATION

1. PROOF OF CONSTITUTION OF BUSINESS(AS APPROPRIATE)

• In case of proprietary firm: no proof required
• In case of partnership firm: copy of partnership deed
• In case of company: copy of Memorandum of Association and Articles of Association
• In case of other constitution: copy of relevant documents

1. PROOF OF PERMANENT RESIDENTIAL ADDRESS

(Any two of the below)

• Copy of passport
• Copy of driving license
• Copy of election photo identity card
• Copy of property card or latest receipt of property tax of municipal corporation/council/gram panchayat as the case may be
• Copy of latest paid electricity bill in the name of the applicant

3.  PROOF OF PLACE OF BUSINESS

• IN CASE OF OWNER : proof of ownership of premises viz; copy of property card or ownership deed or agreement with builder or any other relevant documents.
• IN CASE OF TENANT/SUB TENANT: proof of tenancy/sub tenancy like copy of tenancy agreement or rent receipt or leave and license or consent letter etc.
• Copy of electricity bill.

1. PROOF OF BANK ACCOUNT

• A leaf of cancelled cheque of the current bank account in the name of the business ( trade name )

1. Two latest passport size photographs of the applicant

2. Copy of Income Tax Pan Card

7.  Challan in original showing payment of registration fee.

FEES PAYABLE

• VOLUNTARY REGISTRATION: ₹ 5,000/- with a refundable interest free deposit of ₹ 25,000/- along with challan in Form 210.
• OTHERS: ₹ 500/- only (payment of fees of ₹ 500 wherever applicable may be paid through court fee stamps also).
• DD / PO of nationalized bank for all the above fees & deposit to be made in favor of “Bank of Maharashtra A/C  MVAT” payable at Mumbai for Mumbai Jurisdiction and “State Bank of India, A/C MVAT” payable at respective jurisdiction.

Advantages & Disadvantages

Advantages of Registration	Disadvantages of Non Registration
He can claim set off of tax paid on the purchase if eligible to get any.	He cannot claim any set off or refund of the tax paid by him
He can  issue various declarations prescribed C.S.T. Acts like Form  C etc.	Purchases at concessional rate of tax not available to him. He cannot issue forms or declarations like Form C etc.
Registered dealer is liable to pay tax on the sales effected by him however he can collect tax from buyer.	Unregistered dealer is liable to pay tax on the sales effected by him but he can not collect tax from buyer.
Registered dealers are preferred while awarding the government contracts.	Possibilities of non consideration for awarding the government contracts.

CANCELLATION OF REGISTRATION

• The Registered Dealer shall apply for cancellation of registration in form 103, within prescribed time where the Business is transferred/discontinued/disposed off.
• The Registered Dealer may apply for cancellation of registration if during any year his turnover has not exceeded the relevant limit as specified in section 3(4).

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