You must keep records of all sales and purchases of goods and a summary of VAT for each tax period covered by your VAT returns. This summary is called a “VAT Account”. If you are already in business, you will find that your normal business records can be adapted to give this information.

Every month, you must file a VAT return on Form VAT 200. The period covered by the return is called a Tax Period and will cover a calendar month.

You have to fill in details of the sales and purchases in that period and pay the total tax you owe to the Commercial Taxes Department or claim a refund or a credit.

Your VAT return and payment relating to a tax period must reach the Tax Office by the 20th day of the following month.

There are penalties for late filing of the return and for late payment or failure to pay the tax.

If you start a business, or have a business operating you must apply for registration as a TOT dealer at your local Tax Office, if your taxable turnover in the preceding 12 consecutive months exceeds Rs.5 lakhs or you expect it to exceed Rs.5 lakhs.