Tamil Nadu VAT and TIN Registration
Value Added Tax (VAT) levies on the value added to the commodity during the production and distribution process. At each stage in the value chain, the dealer collects TNVAT for the sales. The dealer shall retain the tax paid on the purchase and pays the balance to the Government Treasury. Thus the final VAT liability passes onto the buyer or to the end customer. The State Governments in India validate the VAT Tax. Thus, the State Governments acquire sovereign rights to determine tax rates and compliance requirements for each state. In this article, let’s look at VAT & TIN Registration along with VAT return filing in Tamil Nadu.
Tamil Nadu VAT Registration
The registration for VAT applies to individuals upon purchasing or selling goods within Tamil Nadu. The registration applies irrespective of business entity. It also applies when the turnover of the entity reaches greater than or equal to Rs.5 lakh p.a. The VAT shall apply for the business entity if the turnover of the entity reaches greater than or equal to Rs.10 lakh p.a. The regulations for VAT shall become applicable implemented and governed by the Tamil Nadu VAT Act 2006. The Act applies to the entire state of Tamil Nadu. However, the Act mandates the registration of VAT irrespective of the quantum of turnover. The following shall require VAT:
- Jewellers or Bullion Traders
- Factors, Brokers, Commission Agents
- Mercantile Agents
- Non-Resident Agents or their Principal
- Dealers making purchases against C Form
In addition to the above, any entity establishing a business can apply for registration in Tamil Nadu. Obtaining VAT Registration in Tamil Nadu takes within a week. There may be instances where the applicant registered for VAT and yet to receive the confirmation. During those circumstances, if the application crossed 30 days, the registration shall be treated as approved.
During registration of VAT, the applicants receive Tax-Payer Identification Number (TIN) number. TIN operates as a unique number and allotted by the State Governments Commercial Tax department. The first two digits of the TIN Number represent the State of Registration. All the dealers shall quote the TIN number on all correspondence regarding the VAT Registration. Therefore, VAT Registration and TIN Registration can be used synonymously, as they mean the same.
Tamil Nadu VAT Rate
The Tamil Nadu VAT rate can be divided into three categories:
- Items in Part A of Schedule I,
- Goods referred to Part B of Schedule I and
- Items mentioned in Part C of Schedule I.
The following mentions Tamil Nadu VAT (tnvat) rate for each category:
- Goods in Part A of Schedule I taxed at 1% – (i.e, Gold, Silver, Precious Metals, Jewellery, etc.,)
- Items mentioned in Part B of Schedule I taxed at 5% (i.e, Utensils, Coffee beans and seeds, computer stationery, pipes, printed materials like diary & calendar, etc.,)
- Items referred to Part C of Schedule I taxed at 14.5% (Air conditioners, bakery products, cement, cosmetics, dry fruits, electronic toys and games, etc.,)
Click here to Download Complete Tamil Nadu VAT Rate Schedule.
The applicant shall file the tnvat return monthly. The applicant can file tnvat returns manually or through e-filings. Persons or entities having a turnover of Rs.2 crores or in the previous year shall file their monthly vat return on the 20th of each month for the previous month. Those having a turnover of more than Rs.2 crores are required to file their monthly TN VAT monthly return on the 22nd of each month for the previous month. Further, those dealers who are not liable to pay VAT tax should file their return annually before the 20th day of May.
The end customer pays the VAT. Therefore, it is the responsibility of the dealer to collect VAT tax on his/her sales and remit the same with the Sales Tax department before the due date. Dealers having an annual turnover of Rs.2 crores or more must make their VAT payment/deposit through the electronic VAT e-payment facility before the 22nd of each month. All others shall remit the VAT payment or deposit by the 20th of each month.