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What is Tax on Turnover (TOT) and how to apply for TOT Dealership?


Before the Value Added Tax(VAT), there was General Sales Tax(GST) in force and it was common to all business people irrespective of business turnover. But after the introduction of VAT it become as a complicated issue for small merchants to pay the Tax on Sales and to maintain the Books of Accounts.

What is Tax on Turnover (TOT) and how to apply for TOT Dealership?
Form VAT 001

As per the AP VAT Act 2005 on or after March 1, 2005 every Trader whose turnover exceeds Rs. 40 Lakh has to register as a VAT Dealer and he has to pay the tax on Sales and must maintain the Books of Accounts and other Records. And for those Traders whose turnover does not exceeds Rs. 40 Lakh are exempted from VAT purview.

The Commercial Tax Department not allowed to collect the VAT amount on Sales from such Traders instead they have introduced the Tax On Turnover which is termed as TOT and is a kind of Indirect Tax. Merchants whose turnover is in between Rs. 5 Lakh and Rs. 40 Lakh for the 12 months has to obtain the TOT Dealership Certificate from the concerned Commercial Tax Office. For this the Applicant has to complete the FORM TOT 001 and submit it to the concerned Commercial Tax Officer in his circle.

How to Register for TOT Certificate from Commercial Tax Department?

All the Merchants whose turnover exceeds Rs. 5 Lakh and does not exceeds Rs. 40 Laksh has to obtain the TOT Certificate from the Commercial Tax Department by submitting the Form TOT 001. It is mandatory to register as a TOT Dealer, if the turnover lies in between the above said amounts.

If the Trader is not applied for VAT Registration they will be issued by a Notification of General Registration as a TOT Dealer, provided your taxable turnover exceeds Rs. 5 Lakh but not Rs. 40 Lakh for 12 months after 31-12-14.

If you are applying for Registration as a TOT dealer under the APVAT Act 2005 on or after 1-4-2005, you must complete a simple application in form TOT 001 and take it to your Tax Office. You will receive a Notice of General Registration if your application is satisfactory.

There are some Obligations are framed for TOT Dealer

There some obligations framed by the APVAT Act 2005 for the TOT Dealers and the terms are jotted down.

  1. The TOT Dealer has to submit the summary report of his Turnover (Sales) each quarter to the Commercial Tax Department through e-Returns.
  2. After e-Returns quarterly the TOT Dealer has to pay the Tax either from Treasury Bank or through Online Payment System from Commercial Tax Department website for each quarter ending June, September, December, and March by the end of the following month.
  3. If, the TOT Dealers fails to file and pay the levy dealer will be charges with penalty and interest charges.
  4. The TOT Dealer is not allowed to claim the Input/Credit Taxes from the Purchase Invoices he made from the VAT Dealer.
  5. He is not authorized to issues TAX INVOICE.

And this about the Tax on Turnover (TOT) and how can a trader register for the TOT Dealership from Commercial Tax Department? And What the TOT Dealer has to do and not to do after obtaining the TOT Certificate.

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is the founder of AccountsGuy.Net with the view of providing Accounting and Technical support using Accounting package Tally ERP 9, and Office Tools to the people. I write articles on Accounts, Blogging, Computer Operating, and technical issues and some of my experiences on them for students, beginners. Follow our Networks or sing-up for the email newsletter below for your daily dose of Tips and Tricks.
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{ 76 Comments... read them below or add one }

kalyan chakravarthi said...

hi,i am planning to start cctv sales and service business,for that what are govt registration should take.like tot ,licence etc .pls help me

Venkkatesh K said...

It is based on the turnover of the Business as i specified above. If you need further assistance regarding this you can contact us @ kshyam24@gmail.com with your contact details. We will assist you.

Unknown said...

A tot dealer can import material from other state

Venkkatesh K said...

Only the VAT Dealer can purchase from other State. TOT Dealer can only purchase within the State.

raogv said...

Hi, any one kindly post clear details of APVAT-CST-TOT side by side.

Venkkatesh K said...

Mr. Rao GV we will updated the information soon. Kindly subscriber to our Blog Post to get the Updates if you need any specific article let us know to put our effort to get it done.
Thanks for reading our Blog.

Ram chowdary said...

Iam doing garments wholesale business which I get tot,tin

Venkkatesh K said...

If your Annual Turnover is Less than 5 Lakh you do not need to Register either as TOT or VAT Dealer.
If your Annual Turnover is in between 5 Lakh and 40 Lakh you need to Register as TOT Dealer.
If your Annual Turnover is more than 40 Lakh you need to Register as VAT Dealer.
The above condition is applicable to all the Trading Concern irrespective of kind of nature of business.

Unknown said...

hii sir, im a small plastic wholesaler,i purchases goods from other states,which taxe is im to pay .....? mi turnover is five laks only.please guide me what type of taxe in appicable for me

Venkkatesh K said...

Only the VAT Dealer can purchase from Other State. Only you have to pay Invoice amount to your Supplier. The Supplier will pay the Tax to the Commercial Tax Department. If you purchase against C Form condition you have give C Form against the Invoice.

Unknown said...

hi
we are having packed food product distributor recently we have registered for VAT but our annual turnover is around 12 laks can we apply for TOT also

Venkkatesh K said...

One person can have multiple set of Proprietary Businesses you may have for one Business VAT and for another TOT.

Unknown said...

Hi,im planing for a startup, regarding food selling online, what all are required for starting my bussiness online, planing for a dealership, not pvt Ltd.

Venkkatesh K said...

For Food Selling first you have to get the Food License from Food Safety and Stands Authority of India. After that you need to apply for VAT and/or CST Licenses.

Unknown said...

I am residing in Bangalore and all my identity and address proofs have Bangalore address. Can I apply for a TOT of license in Visakhapatnam with these proofs of should I produce only Visakhapatnam address and identity proofs?

Madhu said...

I am residing in Bangalore and all my identity and address proofs have Bangalore address. Can I apply for a TOT of license in Visakhapatnam with these proofs of should I produce only Visakhapatnam address and identity proofs?

Madhu said...

I am residing in Bangalore and all my identity and address proofs have Bangalore address. Can I apply for a TOT of license in Visakhapatnam with these proofs of should I produce only Visakhapatnam address and identity proofs?

suresh giduturi said...

Sir I want to start d textail business .if my turnover comes to 5 -10/lacks .shall I go for TOT r Tin.
Shall I purchase from other states like kolkata.,mumbai.through TOT.please give me reply.my email I'd suresh.giduturi@gmail.com.

suresh giduturi said...

I want to start d business in tot act.is it possible to purchase d material from other state .through Tot registration. Pls give me reply.

suresh giduturi said...

Sir I want to start d textail business .if my turnover comes to 5 -10/lacks .shall I go for TOT r Tin.
Shall I purchase from other states like kolkata.,mumbai.through TOT.please give me reply.my email I'd suresh.giduturi@gmail.com.

Venkkatesh K said...

Only the VAT Dealers can Purchase from other State and TOT Dealers has to purchase only within the State.

Deepak Singh said...

I want to start a game shop what are the legal doucument i must have

Venkkatesh K said...

Mr. Deepak Singh,
It is advisable to have the VAT License. If you need any assistance in this regard contact me @ kshyam24@gmail.com

BLOGGerDgold said...

Hi sir Im small bycycle dealer I buy bycycle form other state and sell some time locally and to other states also I registered as tot bcz my turn over is less than 15 laks but my problem is I need way bill to sell other states can I sell as tot to other states and have way bill or do I need to register as vat cst but I think if I register it will be soo hard than tot to maintain

Venkkatesh K said...

If you want to sell to other State you need to have the VAT as well as CST Registration. With TOT you can not sell or buy to/from other State.

BLOGGerDgold said...

So can I register as vat/cst no even if my turn between is 5 to 15lks and is there any benefits to somr one who is under 15 lks for registering as vat cst or even GST my main prob is will it change my business the way it's now and make any significant changes? Btw thx for ur reply

BLOGGerDgold said...

So can I register as vat/cst no even if my turn between is 5 to 15lks and is there any benefits to somr one who is under 15 lks for registering as vat cst or even GST my main prob is will it change my business the way it's now and make any significant changes? Btw thx for ur reply

Venkkatesh K said...

You can voluntarily register for VAT/CST irrespective of your Business Turnover. When GST comes your VAT will be subsumed under GST.

Girish Patnam said...

Thank u for d info sir.. How much tax should be paid for TOT and VAT?? How to pay it??

Venkkatesh K said...

For TOT you have to pay 1% Tax on Sales and there will be no Input against the Purchases and for VAT there different VAT Rates are available and mostly 5 & 14.5% are used. And you have to pay the Tax through Online from Commercial Tax website.

Unknown said...

Current tot number holders if want to apply for vat registration number, do they have to make fresh application or any amendment application

Venkkatesh K said...

If the ACTO has issued an order for your based on your turnover you can do that otherwise. You have to apply for the New VAT Registration and after you receive the VAT License you may apply for the Cancellation of the TOT License.

venkata sai sweets said...

How tot tax percentage for bakery.

Venkkatesh K said...

TOT is only 1% irrespective of the Commodity you trade.

raj said...

is it cumpulsary to pay tax on the closing tax if a TOT dealer who crossed his tot turnover limit and applies for migrating to VAT registration? please explain the step by step procedure to migrate from tot to vat for those dealers who have crossed the turnover limits during the previous month and its tax implications on closing stock as on vat registration has been applied for. thank u

Venkkatesh K said...

As per the VAT Rules & Act there is no provision if the Dealer have directly approached with the VAT Registration application. If you have reached any Notice from the Department it will be cased on the turnover criteria they will levy the Tax and Penalty as per by-laws.

Sadeeq Abdul said...

Hi Sir I'm Doing Computer Sales and Service business and my Annual Turnover is Less than 5 lakh, do i need to pay any taxes for sale and service

Venkkatesh K said...

If your turnover is 5 Lakh you have to apply for TOT and you need to pay 1% Tax on turnover in every quarter of the Year.

Sadeeq Abdul said...

Thanks for your quick reply Venkkatesh Sir, But my question is my turnover is average 3.5 lakh to 4 lahks, and as i said im doing computer sales and servicing business for this i need to pay tax or not

Venkkatesh K said...

You do not need to pay any Tax as per AP Commercial Tax Act & Rules 2005.

Sadeeq Abdul said...

Thank you sir

Ramanuja Gupta said...

hi sir ,
i am a tot dealer with a turnover of 45 lacks per annum. i want to increase it more not. now i had a stock of nearly 30 lacks.what will happens if gst comes. will i get input for the stock i had or by any means. or shall i trasfer to tin and then to gst. please clarify my doubts and give me the best suggestion.

Ramanuja Gupta said...

hi sir ,
i am a tot dealer with a turnover of 45 lacks per annum. i want to increase it more not. now i had a stock of nearly 30 lacks.what will happens if gst comes. will i get input for the stock i had or by any means. or shall i trasfer to tin and then to gst. please clarify my doubts and give me the best suggestion.

Venkkatesh K said...

After GST came into effect you have to apply for GST even now you are ought to be a VAT Dealer as your Turnover crossed the VAT Threshold limit of 40 Lakh. If still need any assistance contact me @ kshyam24@gmail.com

Bhanu Pramod said...

IS VAT licence holders need to pay sales tax additional!.

Venkkatesh K said...

Mr. Bahnu Pramod,
Ask your query in detail.

Unknown said...

Hello sir this is Avi
I what to small clearfication

Venkkatesh K said...

Contact me @ kshyam24@gmail.com

Unknown said...

Dear sir how to file e returns for TOT sales

Unknown said...

Dear sir how to file e returns for TOT sales

lovelyfazilka said...

hello sir
how to check online my req.no online for the Apply TOT no.

RAJA SHEKAR Maddineni said...

Hai sir,
This is raja sekhar.
To start a business of selling in online platforms, they are asking for vat registration. So if my business doesnt exceed 40 lacs but if now am registering as expected sales crossing the threshold limits, will there be any problem and if after registering if i fail to file returns will there be any penalty as even my business is registered it is not in the threshold limits. Also plz guide for the documents required for registration and registration charges to be paid.

Venkkatesh K said...

Contact me @ kshyam24@gmail.com

gupta said...

first of all thanks for querries sir,and i newely started a provisional store which turnover may be 30 lakhs per annum. As said above 1% TOT need to pay at a time or in installments ( suppose if quarterly) then on the basic of quarterly sales

Venkkatesh K said...

You need to submit the TOT returns quarterly and you have to pay the tax after submitting the returns only.

Shreepal Tater said...

Last month I fill up My vat but I fill up it wrong.I want to fill up amount on sale column but it fill up by mistakenly in purchase column.Suggest me.

Venkkatesh K said...

Still you can revise your VAT Returns. If any assistance contact at advice@accountsguy.net

Sahil Gupta said...

sir i want to start my business as a distributor. I want to be a distribitor of fmcg products, cosmetic products, readymade kurtis etc. I Just will apply for a tin number in few days, but i am not sure how much my turnover will be. I applying for the tin number just because i have to purchase stock outside the j&k. Now if my sales below 12lakhs then shall i have to apply for tot also?

Venkkatesh K said...

Mr. Sahil Gupta,
As you already applied for VAT you do not need to apply for TOT. Right now you need to enroll to the GST as soon as you get the VAT License from the Commercial Tax Department. If need further assistance contact us to advice@accountsguy.net

BEHARA SATYANANDAM said...

You are doing excellent service for the lay persons in indirect tax matters. Good job sir

Venkkatesh K said...

Thank you.

Unknown said...

Present tot limit is 40 lacks or 50 lacks

Venkkatesh K said...

In Andhra Pradesh present TOT limit between 5 Lakh to 40 Lakh.

Venkatesh Ayisetty said...

SIR iam doing a business with less than 5 lakhs turnover,but i have registered with TOT in the month of may 2016 n i have paid 200 through internet banking without filling ereturns in the month of july,afterthat i haven't paid the money.will the authorities cancel my shop registration?what will be next step should i have to follow?

Venkkatesh K said...

You have submit quarter returns and have to pay the tax if tax payable. Otherwise, your license shall be canceled. First submit the pending returns and make the payment of the tax if due.

Venkatesh Ayisetty said...

what should i have to do now to be free from TOT and make license for my business which come under less than 5 lakhs.

Venkkatesh K said...

You can do business without any license if turnover is less than 5 lakh per annum.

Venkatesh Ayisetty said...

Thnaq for ur guidence

Venkkatesh K said...

You are most welcome.

Ranjeet Kumar said...

Hello Dear Venkkatesh,
Thank you for the information on TOT. I have a few questions

1)I have a medical shop in partnership(I am the managing partner in 60:40 ratio). I got the medical licence 15months ago, but I have not taken the TOT as yet.

2)Our turnover for this FY is 22,00,000. I know I qualify for TOT, but I do not know how to proceed.

3)Can I get the TOT licence from the government website by applying online? What will be the fees, late fees, fines, etc?

4)After getting the TOT, how much to pay? You said 1%. So that means 22,000?

5)Is this tax on Turnover in addition to the income tax? In my case, say we have a profit of 8,00,000 and my share is 4,80,000. Then my IT will be 11,500. So do I need to pay a total of 33,500/-?

Kindly reply in as much detail as possible. I guess your answer will help a lot of other people with similar doubts.

Thank you,
Ranjeet

Venkkatesh K said...

You have to apply for VAT and not for TOT and your is complicated situation contact any auditor or us on advice@accountsguy.net for further assistance.

Ranjeet Gubbala said...

Thanks.
But isn't VAT only required if the turnover is more than 40 lakhs?

Ranjeet Gubbala said...

Thanks.
But isn't VAT only required if the turnover is more than 40 lakhs?

Venkkatesh K said...

Yes

dandu said...

i am purchasing sugar as raw material which is 0% vat slab. Now i am adding 10% corn and making it as a floor and selling them to bakerys. My turnover is about 20 lakhs per annum.
1. Am i eligible to TOT registration ?
2. If not what is rate taxable on APVAT?
3. In TOT registration can i make TAX INVOICE means LORRY RECEIPT ?

Venkkatesh K said...

Mr. Dandu,

I have already explained all the things regarding TOT in this article and in some comments just go through it. If still having any doubt contact at advice@accountsguy.net

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