Regarding VAT- TIN Registration - Business & Economy - Entrepreneurship - TIK Share

Regarding VAT- TIN Registration


Girish Iyer

2015-03-02

Hi,

I am based in Bangalore and desire to start a business in bangalore offering Solar Power Systems, Permanent Magnet Alternators and Organic Composting systems

Right now i dont have any VAT or TIN Registration and there is a possibilty of doing a trading business of buying and selling permanent magnet alternator

The entire transaction is less than 3 lakhs, but the client says that he can place order only on company name and not individual which means i will then need a Current Account in the company name for him to send the payment

The purchase of the permanent magnet alternator will be from Ludhiana and resale will be both to Jamnagar, Gujrat

How can i open a current bank account in the name of my company now without VAT / TIN Registration, since the transaction is less than 5 lakhs will i still need to get VAT/TIN registration.

Without VAT / TIN Registration can i buy and sell from/to outside karnataka

 

Kindly reply to my email cbeiyer@gmail.com

 

Thanking you in advance

 

Girish

CA Pulkit Sharma

2015-03-02

Hi Girish,

First let us understand what a company name means. Company is generally a private limited company registered with ROC.

If you client requires a company registered under ROC then you have to get your company registered with ROC.

If he means a sole proprietory or partnership firm, then you can have it on your name with a business name.

For example you can open a proprietory firm with name XYZ trader.

To open a current account on the name of your firm XYZ trader you need to prove existance of business to banks.

You can register with VAT department, you can register even if your sales is less or no sales but business exists.

Regarding purchasing from other states, You need to register with VAT to engage in interstate trading. You can read section 22 of Karnataka VAT act to further understand the issue.

You are adviced to go through the article Registration provisions under Karnataka Vat Act to understand the vat registration provisions.

Please feel free to ask further doubts.

Reply

Vedanta Deshika

2015-03-02

Mr Girish Iyer,

As per Sec 22 of KVAT Act, 2005 , you are liable to be registered under VAT since your monthly turnover has exceeded 62,500 as per Sec 22(2).

You are also made liable to VAT registration u/2 22(5) after your first purchase from outside the state irrespective of the value. However, you may register after you have finished your first purchase.

TIN no is the basic proof of existence of your business for all the outside parties. Hence, you are legally and also as a matter of prudence required to get a VAT registration.

Reply

Girish Iyer

2015-03-02

Hi Pulkit

Thank you very much for your prompt response

I plan to operate a Sole Proprietary concern, and as of now immediate transactions would be trading where i buy and sell and there for i dont have any office premise and operate from home only

i had submitted the offer for this alternator to a client in jamnagar adding my profits to the cost of the alternator which i plan to buy from Ludhiana

Since i have sent the offer for the alternator to the client in jamnagar on my company name, he says that the purchase order and payments would be through his bank to my bank

Currently i dont have any current accounts in the name of the company in any bank to which i can ask the client to send the purchase order and payments

To be able to complete this transaction of buying from ludhiana and selling to jamnagar will i have to get TIN/VAT Registration in bangalore,

What will be the cost of getting this proprietary concern registered for VAT/TIN in bangalore and how much time will it take for getting the Certificate with TIN/VAT numbers

i have also sent you a email to your ID in this regards

Thanking you Once again

Best Rgds

 

Girish Iyer

Reply