Sales tax is levied on the sale of movable goods. Most of the Indian States have replaced Sales tax with Value Added Tax (VAT) from 1 April 2005. VAT is imposed on goods only and not services and it has replaced sales tax. Other indirect taxes such as excise duty, service tax etc., are not replaced by VAT. VAT is implemented at the State level by State Governments. VAT is applied on each stage of sale with a mechanism of credit for the input VAT paid. There are four slabs of VAT:-
- 0% for essential commodities.
- 1% on bullion and precious stones.
- 4% on industrial inputs and capital goods and items of mass consumption
- All other items 12.5%
- Petroleum products, tobacco, liquor etc., attract higher VAT rates that vary from State to State.
VAT Schedule (Click here to obtain the Schedule of items under VAT)
VAT Rates (Click here to obtain the VAT rates for various commodities)
Municipal / Local Taxes
Octroi / Entry tax: - Some municipal jurisdictions levy octroi/entry tax on entry of goods.