VAT in Chandigarh: Rates, Eligibility, Registration Process & Fee

Chandigarh Government has introduced the VAT (Value Added Tax) system throughout the state. The main aim of this system was to do away with the practice of double taxation and cascading effect of the existing sales tax structure. Read below to know more about VAT in Chandigarh.

What Is Value Added Tax?

VAT or value-added tax is considered a consumption tax levied on goods and services. This value is added at every phase of the supply chain. Introduced on April 1, 2005, each state has its own VAT laws for proper implementation and levying. Further, different VAT rates are imposed on the goods and services in various states according to their implied laws.

What Are the VAT Rates for Goods or Services in Chandigarh?

According to Chandigarh VAT rules, 2005, the following are the rates levied on goods and services:

Schedules	Applicable Goods or Services	VAT Rates in Chandigarh
Schedule I	Operated agricultural implements, renewable energy materials, paper and newsprint, lifesaving drugs, kerosene, fresh fruits, textiles, fresh vegetables, and much more.	Exempted
Schedule 2(A)	Goods sold from DTA (Domestic Tariff Area) to SEZ (Special Economic zones) and EOU (Export-oriented Units), goods exported by EOU (Export-oriented units), goods sold between EOU & SEZ	Exempted
Schedule 2(B)	Platinum, Gold and silver, precious stones and bullion	1%
Schedule 2(C)	Agricultural implements, hospital equipment, bulk drugs, kitchenware, sports goods, etc.	5%
Schedule 2(D)	Tobacco products, arms and ammunition, aeroplanes and other aircraft, electronic gadgets, advertising hoardings, cosmetics, etc.	13.5%
Schedule 3	All kinds of contractual works	13.5%
Schedule 3(A)	Types of work contracts include plant and machinery installation, construction of motor vehicles, programming of computer software, building construction, etc.	30%

Who Should Pay VAT in Chandigarh?

Individuals registered under the Central Sales Tax Act, 1956 (Central Act No.74 of 1956) are responsible for paying VAT in Chandigarh under this Act. This applies to any sale made by them within the state's boundaries. Any person having an annual income of more than Rs. 5 lakh is liable to pay the same. Further, it is levied on both local and imported goods.

How to Register for VAT in Chandigarh Online?

Individuals can register for VAT in Chandigarh online. However, there are certain guidelines for the enrolment mentioned below:

The online registration process is as follows:

Step 1: Log on to the e-registration portal of Chandigarh Taxation Department

Step 2: Click on the registration tab

Step 3: Add necessary information and documents as per requirement

Step 4: You will get a temporary VAT registration number

Step 5: After verification, you will receive a Permanent VAT registration number

Step 6: Check your VAT status online

How to Pay for VAT Registration Fee in Chandigarh Online?

Following steps show how to pay VAT Registration Fee:

Step 1: After completing the registration process, you can start the payment process through the official website of Department of Excise and Taxation Chandigarh Administration.

Step 2: Select 'e-Payment Option' on the main page.

Step 3: Provide the username and password and click on the option 'Login'.

Step 4: Now, you can select the bank and enter other necessary details.

After clicking on the 'Submit' button, you will get a reference number, note it down in case of future references.

How to File a Return Against VAT Payment in Chandigarh?

You can file your vat return in Chandigarh online by following the steps mentioned below:

Step 1: Visit the official portal of Chandigarh government.

Step 2: Click on the What's New section.

Step 3: Find the procedure to file e-file VAT Returns.

Step 4: Download the VAT e-forms and save it.

Step 5: Open the e-filling application on that page.

Step 6: Login with your verified username and password.

Step 7: Upload your form by clicking on the browse option.

Step 8: The final receipt will be generated.

Step 9: Click on the print button to view a pop-up window. Print the receipt from that window or save it accordingly.

Step 10: Submit them along with the signed hard copies and upload the return forms.

How Is VAT Different from GST in Chandigarh?

GST (Goods and Services Tax, 2017) has been designed to be a comprehensive and destination-based taxation concept that unifies the entire country. It has revolutionised the Chandigarh taxation system and its collection process. It further intends to eliminate the concept of 'tax on tax'. Hence, initially, the purpose with which the VAT system in Chandigarh was introduced stands irrelevant.

Since GST has taken over the entire taxation system, the economy of Chandigarh is improving by eliminating an overflowing tax system and streamlining the overall business process in Punjab.

After introducing GST or Goods and Service Taxes on July 1 2017, the entire VAT system was replaced. Not only in Chandigarh, but it is also applicable uniformly throughout India. The process of GST collection is the same in every state. Hence, Central and State Governments are in charge of it apart from sharing tax amounts.

This is all you need to know about VAT in Chandigarh. Going through the above sections can give you a hassle-free experience while registering or paying for the same.

Frequently Asked Questions

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Who levies VAT in Chandigarh?

Chandigarh Administration Excise and Tax Department levies VAT on the goods and services in Chandigarh.

How often should you pay Value Added Tax in Chandigarh?

A dealer must pay one month from the submission date after completing their application as per Punjab VAT Act-2005 or Central Sales Tax Act, 1949 as applicable to U.T., Chandigarh.

Where can you check the VAT registration status in Chandigarh?

To check the registration status, you just have to log-in to the e-registration website of Chandigarh Government and provide the necessary credentials to see the VAT status and the dealer status.