VAT/CST Registration

The scheme of Delhi Value Added Tax Act, 2004 (herein after referred as ‘DVAT’) provides for two type of registration: One Voluntary Registration and Second Mandatory Registration.

A dealer applies for voluntary registration in cases where he is not required to get mandatory registration and he is a dealer or he intends to start his business in Delhi from a particular date which would make him a dealer. It is not necessary for dealer who starts his business in Delhi to get itself registered with the Sales Tax Department at the time of starting his business until it becomes mandatory for a dealer to get itself registered with the department upon the following developments:

  • In case of a dealer when already engaged in a business, his turnover in the current year exceeds Rs 10,00,000.
  • He is liable to pay tax or is registered or required to be registered under Central Sales tax Act, 1956 ie. Dealer has conducted any inter state sale or purchase.
  • In case of Casual Trader, three days prior to commencement of the business activity in Delhi.

For registration purposes the turnover does not include sale of capital assets, sales made in the course of winding up of business and sales made in the course of a permanent diminution of the dealer’s activity. In the case of dealers involved in the execution of works contracts, the turnover includes the total contract amount.

Points to Ponder

  • Time Limit – A dealer must apply for registration within 30 days from the date on which it becomes mandatory for him to get itself registered with the department by making an application in the prescribed DVAT 04 Form.
  • Single registration even in case where the dealer is having more than one business premises within Delhi. However, it is necessary to mention all premises in the registration application.
  • In case of more than one place of business within Delhi, the Dealer needs to nominate any one such branch or place as its principal place of business.

Documents and Information necessary for Registration

  • Resolution to the effect of VAT registration in Delhi and also containing the authorisation for a particular director to undertake all relevant formalities for DVAT registration.
  • If dealer is liable for registration due to becoming liable to pay tax under CST:
    1. First Purchase Bill
    2. First Inter state sale bill
    3. Copy of G.R./ R.R. relating to dispatch of goods
    4. Photocopy of the draft/ cheque received
    5. Bank Statement consisting of such payment
  • Proof of Incorporation of the Co., Partnership deed etc. in cases of constitutions other than proprietary.
  • Copy of rent agreement/ proof of legal possession of the principal place and additional places of business at Delhi and also NOC from Lessor.
  • Copy of PAN of firm.
  • Copy of VAT & CST registration certificate of other locations of the company.
  • Photographs of the Prop./Partner
  • Copy of PAN of Prop/Partner.
  • Details of Bank account in Delhi with Account number, bank name and branch and MICR code.
  • Copy of bank statement to substantiate the same.
  • Application form of VAT (DVAT 04) & CST (Form A) for registration duly signed by the authorised Director/ Partner/ Proprietor/person.
  • Details of authorised signatory in Delhi with his PAN and address proof and photograph.
  • List of goods to be traded
  • Surety of Rs. 1 Lakh in Form DVAT 12.
  • Registration Fee of Rs 500 in the form of Court Fee stamps and a fee of Rs 25 under CST in the form of court stamps

Amount of Security
Dealer at the time of registration is required to furnish a security for an amount not exceeding Rs 1,00,000, which may be reduced by the following amount: