VAT in Meghalaya: Rates, Eligibility, Registration Process & Fee

Value Added Tax or VAT in Meghalaya was introduced in 2003. The government levied this indirect tax on goods and services when the commodities were sold to the buyer. As a result, the manufacturers and sellers passed the liability for paying the VAT on consumers.

In this state Value Added Tax Act or Meghalaya Value Added Sales Tax Act regulates its implementation. Since this tax has multiple stages, the state government has made guidelines under the Meghalaya VAT Act to maintain the smooth implementation of this taxation system.

Value Added Tax is a form of indirect tax like Excise duty levied on the sales of goods and products. Its implementation and guidelines vary from one state to another as the state governments are in charge of the proceeds coming from VAT.

VAT was an integral part of the nation's GDP, even though it had a cascading effect on the economy. Additionally, any business or individual whose annual turnover is equal to or more than ₹ 5 Lakhs must register the business to pay VAT to the state government. However, the Meghalaya VAT rules might differ from other states' VAT rules and will only extend to Meghalaya.

People who are liable to pay VAT in Meghalaya include:

• Dealers whose annual business turnover is equal to or more than ₹ 1 Lakh
• Any dealer whose turnover surpasses their taxable quantum
• Business owners are liable to pay tax under any of the laws that this Act or any other Central Sales Tax Act, 1956 has reversed
• Sellers are liable to pay taxes if they affect the deal

Any dealer can register with the Excise Registration Taxation Stamps Department or choose to e-Register for VAT in Meghalaya through the official portal. E-registration service allows business owners to fill out the forms online and apply for VAT registration certificates without hassle.

The steps to register for VAT online are as follows:

Step 1: Log in to the official website

Step 2: Navigate to the "services" tab and search for Excise Registration Taxation Stamps Department in the Department/Office Wise section

Steps 3: Click on online VAT registration

Step 4: There are 9 tabs in the registration module

Step 5: Initially, applicants can only access two tabs, and these are "registration guide" and "dealer details"

Step 6: Applicants who want to apply for fresh registration need to navigate to "dealer details"

Step 7: One can only move further after filling up all information in the "dealer details" segment

Step 8: Dealers need to input their current email and phone number so that authorities can contact them when required

Step 9: Applicants also need to fill up a certain form. These Meghalaya VAT forms include:

• Form 1 – This form is an application for registration
• Form 2 – This is a certificate of registration under Section 31
• Form 32 – This is a tax invoice form
• Form 17 – This form is for declaration for importing taxable products into Meghalaya
• Form 18 – This form is a declaration for taxable shipping goods outside Meghalaya
• Form 39 –This is a tax clearance certificate

Step 10: One also needs to upload scanned copies of certain documents. These documents include:

• PAN
• EPIC
• Labour Certificate
• Headman Address Proof Certificate
• Trading Licence from District Council
• Municipal Licence

Step 11: After providing all the information, one needs to click on the save button and then submit

Step 12: Post submission of data and documents, the portal will send a system-generated application number, which the applicant can use in the future for tracking purposes

Step 13: Dealers will receive email on SMS for certificate collection

Dealers can pay the VAT registration fee online as well. One needs to follow the steps below:

Step 1: After the registration request is submitted through the official website, the applicant will be redirected to the online payment page

Step 2: From there, they can enter their bank details and pay the registration fee

After a successful transaction, one will receive an acknowledgement slip and number which the applicant must maintain carefully.

Registered users can file for return against the VAT payment in Meghalaya online. In order to do so, one can follow the steps below:

Step 1: Visit the official website

Step 2: Registered users need to again submit certain documents like PAN, EPIC, Labour certificate, Municipal Licence, Trading Licence from District council, Headman address proof certificate, etc

Step 3: Further under Section 35, applicants also need to fill up some forms for submission of periodic returns and payments of tax. These forms are:

• Form 5 – This form is for tax returns that are to be submitted 21 days before the close of the tax period
• Form 6 – This form is for annual returns that are to be submitted 30 days before the end of the year
• Form 54 – This form is for registered dealers.

The introduction of Goods and Services Tax (GST) has overshadowed the use of VAT in most Indian states. The main reason for GSTs popularity is that it eliminates the cascading effect that indirect taxes have on the economy, especially the VAT.

Moreover, VAT has been merged into GST for most goods and services. Different VAT rates and rules in every state was not a very practical thing to do. Also, in the case of GST, the consumer tax collects the tax instead of the seller state; hence the liability of paying for the taxes is removed from the buyers. However, VAT is still levied on certain goods like petrol.

This blog discussed VAT in Meghalaya and covered aspects like registration, e-payment and e-filing.