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.
Hi Mr anwar i happened to see your post. Prior to seeing your post i too had similar doubts. I had a chance to meet a taxman he answered some of my query . I am from kerala so i enquired here. I will answer one by one . 1. Any transaction which initiates sale of goods needs tax to be paid for government. Once the turnover of the business reaches 5 lakh vat registration is compulsory . 2. Hope the above is the answer 3. As u said for registration 15 and 25 thousand is necessary . But there is one more option, if u have land or if any friends has it can be used as security by getting the solvency certificate from village officer or thasildar. Thus u can save the money 4. Yes premises is necessary for registration. U can rent any building in remote area for this purpose. Any further doubts u may call me on 9809444887 yusuf
anwar, even though you have asked the original question your own information is most comprehensive. The only statement i did not understand is the following:
"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."
So in the first 6 months how does one issue an invoice for buyer without a vat/cst? Isn't a vat/cst number required on the invoice, or can it just be printed on plain paper with no details of seller.
My neighbour is a CA here in New Delhi and he is taking Rs.10000 for VAT/CST Registration!!!! If anyone is facing problem in getting their TIN number then he can take advise from him. Message me for his number.
I am a registered dealer in chennai and I am doing the business for the past 20 years. Tax structure has changed and the VAT form is rather simplified. Value added tax is nothing but claiming the input tax (ITC)available on every purchase. But only a registered dealer can claim the VAT and also if it is within the state. No individual can claim the ITC on the basis of purchase bill. Regarding the CST any sale that is interstate comes under the CST act. If the buyer is also registered then the seller can bill the product for a tax of 2% and for the rebate that he had given to the buyer he has to give the Commercial tax dept. a form called 'C From' claiming for the rebate he had passed on to the buyer. In this case also no individual can do the same and the seller also cannot do on 2% Tax structure. Inter state selling is allowed if the local sales tax is collected from the buyer and the same remitted to the dept. It is really very easy to get a vat no and also to maintain it. To sell old items I don't think we need to have a registration because it will be sold as is where is condition and no warranty issue involved.
Hello Everyone i am really stucked with the legal formalities to sell on ebay i am really shocked that even ebay dosent have any answer for the queries i want to ask u few question please help me by answering .
1. Do i need to pay sales tax on products which i buy without bill like mobile cases , covers, and all small small accessories?
2. Do i need to be a registered company to sell on ebay legally ?
3.What should i do to sell on ebay legally without any problems i mostly sells tablets accessories , cameras battery chargers , etc so do i need to pay sales taxi buy my products from the grey market without bill.
DO NOT EVER THINK OF SELLING ANY THING ON EBAY IF YOU ARE NOT SALES TAX REGISTERED DEALER. YOU CAN NOT SELL EVEN RS.1/- ITEM OUTSIDE YOUR OUN STATE WITHOUT SALES TAX REGISTRATION. MANY SELLERS ON EBAY IN DELHI HAVE TO STOP SELLING ON EBAY DUE TO HEAVY PENALTIES PUT UP BY SALES TAX AUTHORITIES... SO BEWARE SELL AT YOUR OWN RISK...WHY DO ANY THING ILLEGAL FOR SMALL PROFIT..
My consultant has told me VAT is applicable on all sales. Where as there are different rate slab. Its 4% on Computer & Peripherals & rest all have to be charged 12.5%. Also would like to point out that, as the amount is directly sent to your bank account, you will have to reply to the IT if any query arises. And the penalty for concealment of income is 200% + interest. Phew
Im searching for the total amount and place to register for VAT number. some one have told me that it will take abt 30k for a CST and VAT number. Im not looking out for expected turnover over 5lacs in first year. hence do i still need to register for a VAT number. pls also suggest a proper channel to apply in mumbai.
Many sellers like me who are collecters and buy and sell used persoanl items (coins/fdc's/photo or some collectibles) which is neither manufactured/distributed/sold as a business commodity are not taxed (VAT). Off course, the cap of 5L is far above our sells so that is another issue.
Is is same as you sell your old sofa or TV to someone ....
Further resell means you already paid taxes once. This may not apply to many people but I guess some like me are there .
GUYS I DINT HAVE MUCH TIME TO READ EVERYTHING. but i can say that Ebay cant gv any legal consultancy because in my view there income is also unaccountable since our income is not tracable by govt as most of us not registred so it is quite obvious that the commison that BEYA IS CHARGING is also not tracable..coz they cant show commsion from untracable transaction
and guys dont worry since INDIA IS STILL NOT SO DEVELO[ED ON E-COM PLATFORM SO I-T GUYS CANT TRACE ANYONE SINCE THEY DONT HAVE TECHNOLOGIES YET TO TRACE E-COMMERCE TRANSACTION
SORRY TO SAY I KNOW MIGHT BE LIL UNETHICAL: OPEN MULTIPLE BANK A/Cs (DONOT QUOTE pan,JUST SIGN A DECLARATION THAT YOU DONT HAVE PAN CARD) update your paisa pay with multiple bank a/c's lol
hello sir nothing that, the gov. fee is only Rs.750.00, but the process is very slow, better you go for auditor, he finished with one or two week, @ Rs. 3500 - 4500/- only first made DD sole Pro /Parter DD ( Rs.50. Bond Sheet 3 no.) and the Reg Firm Reg Rs. 750.00 And the applied For Firm PAN Rs. 350 totally : Rs. 4600-5600/-
any thigh el you sell to anybody, to pay tax for gov,so that you must have VAT/CST
its your Safety, Because of ebay traction on your bank account so, ready for all this you do buz its safe for you
well if their is no need to apply immediately for VAT/CST number than how to sell our products on ebay,for if once the product is sold you are required to give invoice to the buyer,even for shipping purpose you require invoice copy,so how can we provide invoice to the buyer or the shipping company for the product sold if we dont have VAT/CST number as we are new and dont have a turnover of 5lacs plz help us out with the invoicing part
Hi yk.motoz, What if 1)You do not manufacture 2)Dont buy from supplier,that is,you are not paying vat 3)sell used stamps and envelopes which dont have a commercial value??? My consultant says vat is not required. Ebay is a major forum of collectors who buy and sell funny stuffs like empty match boxes. They can no way be roped in for vat. In fact I sell match box labels. Thanx, Truly, Amitava
VAT applies to all types of businesses including (1) Importers (2) Manufacturers (3) Distributors (4) Wholesalers (5) Retailers (Most eBay sellers fall into this category) (6) Works Contractors (7) Lessors
This is very important for MAHARASHTRA sellers and much accurate reply for your queries. eBay Sellers are insisted upon registering for VAT rather than CST. Government states that every dealer having a CST number MUST also have a VAT number. Otherwise, VAT is more than enough as CST would be eliminated from the system gradually in future.
"If sellers out here on eBay pay VAT to the supplier and also charge VAT to customers with proper legal invoices mentioning VAT no. and RC no., they will have to record the invoices electronically or physically, and can file a refund for the VAT amount that they have paid for, accompanied with Supplier Invoices (Very nice to hear about it.)"
An new eBay seller need not apply for VAT immediately. VAT is compulsory when the Gross Sales Turnover (Annual sales excluding CST/VAT amount if charged to customers) exceeds 5 Lacs.
So basically we have two categories below 5Lacs and above 5 Lacs. If a seller wishes to apply for VAT, even if his turnover is less than 5Lacs, IT IS CALLED Voluntary Registration(very expensive) otherwise Compulsory Registration.
I am in process of collecting Registration Fees information, so hold on for couple of days.
FAQs that would solve 90% queries out here (The list is very large):
Since I last posted on this thread, there has been many who have contributed their valuable insights and knowledge. Thank You all...
@avinash_gupta_bid You are right, as I have found out for myself. It is not possible (Legally) to sent an item of sale to a different state without a VAT\CST account.
What is possible though is limiting your sales to your local state, for the time being, until you receive the VAT/CST number.
Another requirement in general for trading, even for applying for VAT/CST is, a 'business license' from a local body such as Panchayat or municipality. This can be applied easily, and does not cost much.
Again, please do understand that the information I furnish is what I have found to be true locally here in Kerala. Other states as is evident from other posts in this thread may or may not be different.
"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.
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.
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.
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?
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 ? .
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 ?.
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.
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.
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...
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.
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.
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 )
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