What is the threshold limit for compulsory registration under the VAT Act?
The lower limit prescribed by most State VAT Act is a taxable quantum of Rs. 5 Lacs. Dealers who reach this turnover shall apply for registration, normally within 30 days. Subsequent to the release of the White Paper which contained this threshold limit of Rs. 5 lacs, and to assuage the feelings of small traders, States have been given the flexibility to increase this limit up to Rs. 10 lacs. • What are the categories of dealers who have to register under the VAT Act? Under all State VAT Acts, dealers who are registered under Central Sales Tax Act have to compulsorily register irrespective of the taxable quantum. For other types of dealers, separate taxable quantum is prescribed. In some States, dealers exclusively dealing in exempt/Tax free goods need not apply for registration. • Should existing dealers under the earlier Sales Tax Act, also apply for registration? Most States have provided that existing dealers will automatically be deemed as dealers under the VAT Act, and therefore,
