27 February 2016
My client is an importer of mobile phones. So what is the limit to register for VAT.
Does he get any credit for various duties paid during export in VAT?
03 August 2025
Here’s a clear answer about VAT registration & input tax credit for an **importer of mobile phones** in India (specifics may vary by state):
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### 1. **VAT Registration Limit**
* **Threshold Limit:** For most states, if your client’s turnover exceeds **₹5 lakhs** (some states have ₹10 lakhs), VAT registration is mandatory. * Since your client is an **importer**, the value of imports also counts towards turnover.
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### 2. **Input Tax Credit (ITC) on Duties Paid at Import**
* **VAT and Import Duties:** VAT is a state-level tax on sale of goods. Import duties (customs duty, excise duty, CVD, SAD, etc.) are **central taxes**, not VAT. * **Can VAT credit be claimed on import duties?** No. Input tax credit under VAT can be claimed **only on VAT paid on purchases or inputs**, **not on customs duties or other central taxes**. * **What about VAT on imports?** In some states, VAT is payable on the **value of imported goods** at the time of entry (called Entry Tax or VAT on imports). Your client may be eligible for VAT credit on this VAT component if properly documented. * **Regarding Form 231:** This form (or similar) is typically used to claim VAT credit on inputs. However, it **does not cover customs or other duties paid at import**.
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### **Summary:**
| Aspect | Explanation | | -------------------------- | ----------------------------------------------------------------- | | VAT Registration Threshold | Usually ₹5 or ₹10 lakhs turnover | | Credit on Import Duties | No credit on customs or central duties paid | | Credit on VAT on Imports | Yes, if VAT is charged by the state on imports | | Form 231 | Used for claiming VAT credit on inputs, **not for import duties** |
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If your client wants, I can help you prepare documents or explain how to claim VAT credit on imported goods where applicable. Need help with that?
CAclubindia
