Our company has its registered office in rented residential premises. However, we were just informed by our lawyers that VAT registration cannot be done in residential premises and that we have to take up a commercial premise. Can someone clarify the rules please? For example, can I retain my (rented) residence as the registered office and still use the same for VAT without any repercussion for the owner? We are involved only in online sales at this time!
15 July 2011
Mr Arun, Any place ,whether residential or commercial premises can be used for carrying on a business and registered under VAT law also.The only problem that may arise is when any officials come for inspecting your business premises and find it is your house.In order to avoid this objection,you have to demarcate certain part of your residential accommodation as for business only. MJK
I very much appreciate your clarification. So, if I demarcate a specific area in my rented house, I can register for VAT with the same address? Also, will the house still be considered residential property? I was informed that the owner would have to consent to convert the house to a commercial property and that electricity, for example, will be charged at commercial rates?
16 July 2011
Mr Arun, In a way, all that is required.Owners charge higher rent for commercial use of their premises.Municipal corporations charge tax at a highr rate on commercial buildings than residential accommodations. Lateron you can look into these problems.First try for registration at your concerned vat office.For this purpose owner's consent is not required.You may settle with your house owner also amicably. After taking up a regn you may inform the electricity dept and water supply dept also ,if necessary.When the business grows to the expected level you may take all steps thet are necessary. MJK
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