April 6, 2017 by CA Saurabh Gupta
Whether to apply for VAT/Service tax number of wait for GST?
For any new start-up, this is common query. Following will provide a cue to reach at solution: –
- GST isn’t applicable yet. It is proposed that it would be applicable from 1stJuly 2017. So, if one can wait to defer business till that date, one can wait for registration.
- Else, the start-up who has commenced business operations and needs to adhere to present law.
1. In case of a service provider, one needs to apply for Service tax number as soon as one reaches Rs 9 lacs revenue threshold in the financial year
2. In case of trade in goods, one needs to apply for VAT number on satisfaction of any one of following condition: –
(a) Turnover crosses the threshold (Rs 5 lacs in Haryana & Karnataka, Rs 10 lacs in Maharashtra, Rs 15 lacs in Delhi, limits vary from state to state)
(b) One effects any interstate sales or purchases in course of inter-state trade or import-export
Till the GST Act applicability is notified one needs to adhere to above conditions. The respective VAT or Service tax registrations will be migrated to GST registration in due course.
Will GST be applicable for our business?
GST would be applicable on satisfaction of any one of the following condition:-
- Turnover crosses the threshold of Rs 20 lacs
- One effects any interstate sales or purchases in course of inter-state trade or import-export
When to start charging tax to clients / customers?
- In case of services, one may opt charge service tax upon achieving the threshold of Rs 10 lacs in the year
- In case of VAT / GST, as soon as one is liable to tax, one needs to charge the tax and deposit to government account.
—CA Saurabh Gupta