REGISTRATION OF DEALERS UNDER TAMIL NADU VALUE ADDED TAX ACT, 2006

[Mr. M. GOVINDARAJAN]

Who is a dealer?

                        Dealer means any person who carries on business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment, or for commission, remuneration or other valuable consideration.   The term 'dealer' includes the following:

Ø      A local authority, company, Hindu Undivided Family (HUF), firm or other association of persons which carries on such business;

Ø      A casual trader;

Ø      A factor, a broker, a commission agent, a del credere agent or any other mercantile agent by whatever name called who carries on the business of buying, selling, supplying or distributing goods on behalf of any principal or through a firm or company situated outside Tamil Nadu;

Ø      Every local branch of a firm or company situated outside Tamil Nadu;

Ø      A person engaged in the business of transfer of property in goods involved in the execution of a works contract;

Ø      A person engaged in the business of delivery of goods on hire purchase or any system of payment by installments;

Ø      A person who effects transfer of property in goods other than by way of sale;

Ø      Dealing in eatables including food and drinks.

The following categories are deemed to be a dealer for the purposes of this Act:

Ø      A society including a co-operative society, club or firm or an association which buys, sells, supplies or distributes goods;

Ø      The Central Government or any State Government which buys, sells, supplies or distributes goods.

The following categories are deemed to be a dealer if it disposes of any goods including unclaimed or confiscated or unserviceable or scrap surplus or obsolete goods, or discarded material or waste products by auction or otherwise:

Ø      Port trust;

Ø      Municipal corporation, Municipal Councils and other local authorities;

Ø      Railways;

Ø      Shipping, transport and construction companies;

Ø      Air transport companies and airlines;

Ø      Any person holding permit for the transport vehicles used or adopted to be used for hire;

Ø      Tamil Nadu State Transport Corporations;

Ø      Customs Department;

Ø      Insurance and financial corporations or companies and banks included in the second schedule of Reserve Bank of India Act;

Ø      Advertising agencies;

Ø      Corporation, company, body or authority owned or set up by or subject to administrative control of Central Government or any State Government.

Who are liable for Registration?

Every dealer whose total turnover in respect of purchase and sales within the State in any year is not less than Rs.10 lakhs;

Every other dealer whose turnover in a year is not less than Rs.5 lakhs;

Any other dealer or person intending to commence business at his option;

Every casual trader;

Every dealer in bullion, gold, silver and platinum jewellery;

Every dealer registered under Central Sales Tax Act, 1956;

Every dealer residing outside Tamil Nadu but carrying on business in Tamil Nadu;

Every agent of a non resident dealer;

Every factor, broker, commission agent, del credere agent, auctioneer or any other mercantile agent who is defined as dealer;

Every dealer brings goods from outside Tamil Nadu or effects export of goods irrespective of the quantum of his turnover in such goods.

Procedure for Registration:

Ø      Every application for registration shall be in Form A accompanied by-

-         two recent passport photographs;

-         sufficiently stamped self addressed envelop;

-         proof of payment of registration fee of Rs.500/- for the principal place of business and in addition, a further fee of Rs.50/- in respect of each of the business other than the principal place of business;

Ø      The application shall be filed within thirty days-

-         from the date of commencement of the act;

-         if the dealer reaches the prescribed total turnover within thirty days on reaching the said turn over;

-         from the date of commencement of the business;

-         in respect of casual trader within 24 hours of the commencement of the transaction;

Ø      The application shall be filed with the prescribed registering authority in whose jurisdiction his principal place of business is situated;

Ø      No security deposit is required for registration;

Ø      The authority may entertain the application for a further period of 30 days, if it is satisfied that the appellant has sufficient cause for submitting the application within the prescribed period;

Ø      Every partnership business furnish the details of partners in Form B;

Ø      The Registering authority on receipt of Form A shall acknowledge the receipt;

Ø      If the application is in order the authority shall assign Taxpayer Identification Number (TIN) and issue a certificate of registration in Form D within 30 days from the date of receipt of the application specifying all his places of business with copies of each place of business other than the principal place of business;

Ø      TIN is a eleven digital number to be quoted in all VAT transactions and correspondence;

Ø      All registered dealers under TNGST Act, 1959 whose registration is in force shall be provided with TIN automatically without any fee; But after receipt of TIN the dealers have to file application for obtaining certificate of registration;

Ø      If there is any defect the authority shall issue a notice to the applicant to show cause against rejection of the application within 30 days from the date of receipt of Form A;

Ø      If the certificate of registration is not issued or any show cause notice is not issued within 30 days from the date of receipt of Form A the applicant shall be deemed to have been duly registered.   In such cases the authority shall assign a TIM within 7 days on expiry of 30 days;

Ø      A certificate issued shall take effect from such date as may be specified;

Ø      The certificate issued shall be valid till it is cancelled by the competent authority or on the closure of the business;

Ø      No application for registration shall be refused unless the dealer concerned has been given an opportunity of being heard;

Ø      The Certificate of Registration is not transferable;

Ø      In order to speed up the process of registration one can utilize the e-services through web sites of the department www.tnvat.gov.in

Duplicate copy of Certificate of Registration:

                        If the Certificate of Registration or a copy thereof is lost or accidentally destroyed, the Registering Authority shall on application by the registered dealer accompanied by a fee of Rs.100/- issue a duplicate of the registration certificate.   Issue of duplicate copy shall not be refused unless the dealer concerned has given an opportunity of being heard.

Cancellation of Certificate of Registration:

                        The Certificate of Registration may be cancelled-

-         on closure of the business;

-         by the competent authority, by order, for good and sufficient reasons;

-         if a registered dealer is able to prove to the satisfaction of the prescribed authority that his turnover in each of the two consecutive years immediately preceding the application was less than the limit specified.

Amendment of Certificate of Registration:

                        The Certificate of Registration may be amended under the following circumstances:

The authority may amend any certificate of registration, by order, for good and sufficient reasons;

When there is a change in constitution of business of the dealer, the said dealer shall within 30 days from the date of change furnish the details to the Registering authority who shall amend the certificate of registration if it is satisfied;

On opening a new branch, the dealer shall apply to the registering authority within 30 days and get his certificate of registration amended accordingly;

When a registered dealer changes the name and style of the business or shifts place of business, he shall intimate the fact to the authority within 30 days of such change and get his certificate of registration and amended accordingly.

Non Registration:

                        Any person who being a person obliged to register himself as a dealer under this Act, does not get himself registered shall on conviction by a Magistrate be liable to fine which may extend to Rs.500/-

Discussions to this article

[Thanga Pandi]

Dear Sir,

I reviewed your description about VAT.

We are going to develop and sell softwares and website scripts in and around world.  So this would applicable to pay VAT? or It would come under Export?

As like my understanding, This would come under Export?  For this we have to pay any tax like sales or service or something else?

Am really confused regarding this type of tax rules.  I dont know exact about this.  Also we are looking forward to start the freelancing based outsourcing jobs from worldwide.  For this we need to pay for local government if it reach 10 laks?  SO please clarify me.  I have checked over the internet, i dont find right solution to start up this.

So i checked your article, this having some information regarding what i searched.  Still i have some queries. So i written those in my above comments.  If you can answer that would be useful for others like me.

Regards

Pandia