VAT is a tax which is levied on sale of goods. It is imposed on intra-state sale i.e sale of goods within the state. It is known as Tax on Value Added as it is imposed on the amount of value addition made, where value addition = Sale Price – Purchase Price.
The basic benefit you will get after VAT Registration online is getting your TIN no. which aids you to raise tax invoices to other parties.
You can get the benefit of input tax credit of the duty paid and service tax paid on services, on the basis of specified documents.
With VAT registration you are regarded as registered dealer and without it you’re regarded as an unregistered dealer.
VAT registration will be compulsory for dealers once their annual turnover exceeds Rs. 5 lakhs
The dealers having annual turnover higher than Rs 5 lakhs but upto Rs 50 lakhs during the financial year have an option to opt for the composition scheme under VAT.
Saves lot of time, labour and money in maintenance of records, simplifies calculation of tax liability and very less amount of tax is to be payable.
All business transactions carried on within a State by individuals, partnerships, Companies, etc. will be covered by VAT.
VAT will not cover small business with a turnover below a certain limit. In Odisha, a general trader having annual turnover of Rs.2, 00,000/- or more will be covered under VAT. The dealer, who purchases goods from outside the State for resale inside the State, or sells to outside the State, is liable to pay tax on his first transaction. The taxable limit for works contractor is Rs.50, 000/- and for manufacturer is Rs.1, 00,000/-
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