The article will explain the requirements of registration and when one need to register under The Karnataka Value Added Tax Act, 2003 and obtain TIN/VAT number. Chapter III of The Karnataka Value Added Tax Act, 2003 covers the provision related to registration.

This article will help you in understanding the provisions related to VAT/TIN registration in Karnataka state.

One will be able to understand:

  1. When one needs to register and Obtain TIN/VAT number. (Section 22)
  2. Voluntary Registration (23)
  3. Suo Moto Registration (24)
  4.  TIN/VAT Registration Procedure (25)
  5. Security Deposit (26)
  6. Cancellation of Registration (27)
  7. Obligation of Registered dealer to inform changes after registration (28)
  8. Notes
  9. Reference

Section 22 of The Karnataka Value Added Tax Act, 2003 specifies the liability to register.

  1. Every dealer who at any time has reason to believe that his taxable turnover is likely to exceed 7.5 Lakhs rupees during any year.
  2. Every dealer whose taxable turnover exceeds 65,000 in any one month after the date from which tax shall be levied; in accordance with section 3 shall register forthwith. Section 3 deals with levy of tax.
  3. Every dealer to whom a business or part of a business is transferred by another dealer who is liable to be registered under this Act, shall apply for registration from the date of that transfer, if he is not already transferred.

    This provision requires that if business is transferred and previous dealer was required to obtain the registration, the new owner/dealer should obtain the registration without waiting for the 7.5 mark.
  4. Every dealer liable to register under above provisions shall report his liability to be registered in the prescribed manner at the end of month before due date.
    Dealer should report their liabilities in the form VAT 100 before due date (due date in Karnataka for VAT returns is 20).

Vat Registration liability For Dealers dealing in Interstate or Export transactions

  1. Dealer purchasing material from out of state should get registration after the first purchase and 7.5 lakhs mark is not applicable.
  2. Dealer who exports the materials should obtain registration after the first export.
  3. Dealer who sales materials of state (Inter-state) should obtain the registration after first sale and 7.5 lakhs mark is again not applicable.
  4. Every casual trader and every non-resident dealer or his agent shall be liable to register (before commencement of his business) irrespective of the value of the taxable goods sold and shall report such liability forthwith.

Note: If any dealer deliberately broken up into smaller business to avoid registration, the prescribed authority may issue a notice requiring those businesses to be registered as one business entity.

Voluntary Registration (23)

If a dealer is not liable to register under section 22, can voluntary obtain the registration. However, even if the registration is voluntary dealer should comply with reporting compliances.

Suo Moto Registration (24)

If any dealer fails to obtain the registration, the authority may after conducting such survey, inspection or enquiry as may be prescribed, process to register such person under section 22.

TIN/VAT Registration Procedure (25)

The registration application is prescribed by authority to apply. For registration form VAT-1 should be sued. For is available online. The procedure to register and obtain TIN number is explained in this post.

It should be noted that authority may reject any application; however the reason to disapprove should be given in written. Dealer should be given an opportunity to show cause in writing against such refusal.

Security Deposit (26)

The prescribed authority may, for the proper payment of tax, from time to time demand from a registered dealer or from a dealer who has applied for registration under this Act, reasonable security not exceeding a prescribed amount to be paid in the prescribed manner.

Prescribed authority may, by order, forfeit the whole or any portion of the security furnished by dealer,

  1. For collecting any amount of tax, interest or penalty that is payable by such dealer, or
  2. If such dealer is found to have misused any prescribed certificate or declaration or has failed to keep or retain them in the prescribed manner.
  3. No order shall be passed without giving the dealer an opportunity of showing show cause in writing against such forfeiture.

Cancellation of Registration (27)

In below case where:

  1. Business is discontinued, transferred fully or otherwise disposed of, or
  2. There is change in the status of ownership of the business, or
  3. The taxable turnover of sale of goods has, during any period of twelve consecutive months, not exceeded 7.5 Lakhs, or
  4. Dealer issues tax invoices without effecting any taxable sales, or
  5. The dealer dies,

The prescribed authorities may either on its own or on application of the dealer/legal heirs, made in the prescribed manner, cancel the registration certificate from such date, including any anterior date, as it considers fit having regard to the circumstances of the case.

The cancellation of a certificate of registration shall not affect the liability of the dealer to pay tax, any penalty and interest due for any period prior to the date of cancellation whether or not such tax, penalty or interest is assessed before the date of the cancellation but remains unpaid, or is assessed thereafter.

On cancellation of registration any Input Credit lying unutilized must be repaid on their prevalent market price.

A dealer liable to pay tax under sub-section (3) shall furnish a final return at such time as may be prescribed.

Obligation of Registered dealer to inform changes after registration (28)

The any changes should be reported to authorities in prescribed format, this facility is available online. In following circumstances the changes should be informed to VAT department:

  1. Dispose of business or any part thereof, or
  2. Any changes in the ownership of the business including change in the status, or
  3. Discontinuation of business or changes in place of business or opens a new place of business, or
  4. Changes in name or nature of business

On receiving the application for any amendments, the authorities may amend the registration certificate or reject within thirty days of the date of receipt of such application. The dealer will given an opportunity of showing causes in case of rejection.

If amendments are due to the reason mentioned in above list, the effective date of amendments will be date of any such changes, in other cases the effective date will be the date of application.

If changes are not reported within the prescribed time, it shall be deemed that such changes have not taken place and the dealer as registered shall be liable to tax that is payable in respect of any business carried on.

Please note:

  1. Vat registration is also referred as TIN Registration by layman.
  2. TIN registration is nothing but vat registration.
  3. TIN number is same as VAT number.
  4. Wherever Vat number is mentioned, TIN can be substituted.

Reference for writing the article:

  1. The Karnataka Value Added tax Act, 2003.
  2. The Karnataka Value Added Tax Act, 2003 authored by Shri M.N. Shankare Gowda
  3. Documents for registration
  4. How to apply online for TIN/VAT registration
  5. Check the registration details of already registered dealers from Know your TIN-Check TIN in Karnataka-Verify TIN details in Karnataka-Verify TIN VAT Certificate.


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Posted 2 years, 2 months ago by Girish Iyer

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