Background and Transition to GST The Goods and Services Tax (GST) came into effect from 1st July 2017, replacing VAT, CST, Service Tax, and others State VAT laws remained applicable until 30th June 2017, after which they were subsumed under GST Businesses were...
Impact on Cash Flow and Tax Outflows VAT is collected from customers and paid to the government periodically, which directly affects cash flow Businesses must ensure they deposit VAT on time, even if payments from customers are delayed If output VAT exceeds input VAT,...
Meaning of Advance Ruling in VAT Law An advance ruling is a binding decision given by a tax authority on the interpretation of VAT law before a transaction is undertaken It provides clarity and certainty to the applicant on how VAT will apply to a proposed activity or...
General Treatment of VAT Liability During Insolvency VAT liability becomes part of the overall claims against the insolvent entity The VAT department is treated as a creditor, and tax dues are included in the insolvency resolution or liquidation process Any unpaid...
VAT Registration Suspension Suspension of VAT registration is a temporary deactivation of a dealer’s TIN (Taxpayer Identification Number) It means the dealer cannot issue tax invoices, collect VAT, or claim input credit during the suspension period It is usually...
Nature of Free Samples under VAT Free samples are goods distributed without consideration to promote a product or brand These are commonly used in pharmaceuticals, cosmetics, FMCG, and promotional campaigns Since there is no monetary sale, the transfer of property may...
Understanding Service-cum-Goods Contracts under VAT These contracts involve a combination of supply of goods and provision of services in a single agreement Common examples include construction, interior designing, fabrication, and installation contracts Under VAT...
VAT Department The business owner must submit an application for cancellation of VAT registration to the concerned state VAT office The application should mention reasons for closure, such as discontinuance, transfer, or merger Notification must be made within the...
VAT Registration for Retail Outlets Retail outlets engaged in the sale of taxable goods had to register under VAT if their turnover exceeded the threshold (usually ₹5 to ₹10 lakh, depending on the state) Even small retail shops could opt for voluntary VAT registration...
Understanding Contract Manufacturing under VAT Contract manufacturing involves a principal sending raw materials or components to a job worker or manufacturer for processing or conversion The manufacturer processes the goods and returns the finish ed or semi-finished...