Every dealer is require to get register compulsory under MVAT, whose turnover is exceeds the prescribe limit as mentioned under section 3 (4) of MVAT Act. The turnover limit for the purpose of MVAT registration is given below:
Category of Dealer Turnover
of Sales Turnover of taxable
good purchase or sold
Importer Rs. 1, 00,000 Rs. 10,000
Other than Importer Rs. 5, 00,000* Rs.2,00,000
Here importer means the dealer who purchases the good outside the state of Maharashtra. The turnover limit of
Rs. 1 lack or Rs. 5* lacks is including turnover of all sales whether taxable or tax free. However turnover limit of Rs. 10, 000 is in respect of taxable goods whether purchase
The dealer can also get registered under MVAT voluntarily if he does not cross the turnover limit under
section 3 (4). But for voluntary registration dealer is require to pay Rs. 25,000 as a deposit and Rs. 5,000 as a fee.
Under which circumstances voluntary registration is beneficial:-
1) When dealer is doing manufacturing activity and require to install plant and machinery. It is always beneficial to get register under MVAT as immediately after the voluntary registration he can claim the set off on the plant and machinery purchased by him. If voluntary registration is not done; VAT paid on plant and machinery purchase will be in vain as dealer can not claim the set off during unregistered period.
2) When dealer is trader and he want to purchase the large quantity of goods for the trading purpose before the sales starts. In such situation; voluntary registration is necessary as after registration dealer can claim the set off of
the goods purchase.
Under which circumstances compulsory registration is beneficial:-
When dealer is the small trader and he is not going to purchase the bulk material (say less than Rs. 5, 00,000), then there is no need for voluntary registration. The benefits of compulsory registration are as below:-
1) Dealer is not required to pay the deposit of Rs. 25,000 and registration fees require to pay is Rs.500 only.
can claim initial exemption of tax liability on sales up to Rs. 5, 00,000* under section 3 (2) of MVAT Act.
Registration is compulsory if turnover exceeds prescribe limit as mention above. In default of non-registration penal provisions of MVAT act are applicable.
* Turnover limit of Rs. 5 lakh is increased to 10 lakh with effect from 26th June 2014. Kindly refer following link for more details: http://taxclick.org/type/mvat-cst/amendments-in-maharashtra-value-added-tax-2002-in-additional-budget-2014-2015