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

In Gujarat, VAT is implemented much like in the rest of the country. For instance, a state raises the value added tax on products on which it wishes to decrease consumption and decreases or completely waives off where it wishes to increase its consumption. Through this blog, we will go into details on VAT in Gujarat so that you can make informed decisions before paying.

What Is Value Added Tax?

Value added tax or VAT is a common indirect tax levied on goods and services. A producer must pay the VAT to the government at every stage of the supply chain. Moreover, it applies only to a particular state, meaning the buyer and seller of the goods and products need to belong to the same state.

The Government of India introduced VAT on 1st April 2005 to bring transparency to the taxation system for goods and services. However, the state government implemented VAT in Gujarat on 1st April 2006. Moreover, the Value Added Tax Act provisions depend on which VAT is imposed on various goods and products within the state of Gujarat.

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

VAT rates in Gujarat on the goods and products depend on four categories. The list of things where VAT is applicable and these rates are explained below:

Schedules	Applicable Goods or Services	VAT Rates in Gujarat
Schedule II	Agricultural implement which does not fall under schedule 1	4 paise for every 1 rupee
	Bamboo or articles made thereof
	Bicycles, tricycles, rickshaws, pedal rickshaws and the accessories thereof
	Betel nut and areca nuts
	Biscuits (unbranded)
	Bolts, nuts, screws, and fasteners
	Brass metal parts
	Bricks, roofing tiles
	Trunks, buckets, drums,
	Candles made of wax
	Gold, Silver, other precious metals; jewelry made of these precious metals; precious and semi-precious stones, pearls of any type	1 paise for every 1 rupee
Schedule III	High speed diesel oil	24 paise for every 1 rupee
	Gasoline for aviation	26 paise for every 1 rupee
	Gasoline for aviation (after paying duty)	13 paise for every 1 rupee
	Aviation turbine fuel(bonded)	38 paise for every 1 rupee
	Aviation turbine fuel (after paying duty)	13 paise for every 1 rupee
	Any motor spirit of any other kind	26 paise for every 1 rupee

Who Should Pay VAT in Gujarat?

According to the VAT Act, any dealer or trader from Gujarat with a purchase turnover of Rs 5 lakhs or more is liable to pay taxes. Additionally, if an individual’s taxable turnover exceeds Rs. 10,000 in a particular financial year, even that individual is liable to pay VAT in Gujarat.

How to Register for VAT Payment in Gujarat Online?

Individuals eligible to pay VAT should request registration under VAT Act. Dealers need to register their business and fill up Form 101 for registration along with other necessary documents to registration authorities. This can be done online through the official website of the Commercial Taxes Department, Gujarat. Individuals can follow the step-wise guide mentioned below:

Step 1: Log in to the official website of the Commercial Tax Department of the Government of Gujarat

Step 2: Click on the e-filing tab

Step 3: Duly fill in the form based on the requirements. There are 7 different types of forms, and they are:

Form No. 101- This form is used to register to pay VAT
Form No. 101A- This form is used to declare any other places of business, branches, or warehouses maintained in Gujarat.
Form No. 101-B- This is used to declare places of business, branches or warehouses located outside the state accompanied with their TIN numbers
Form No. 101C- This form is for informing the authority regarding the details of the individual who is authorised to sign invoices, delivery challans, declarations, etc. Further, a separate form is to be filled out for each person who has these privileges
From No. 101D- This form is for declaring the people who are ultimately responsible for the business-like owners and directors
Form No. 101E- This form is used to inform the authorities about the capacity of the company as a manufacturing business
Form No. 106- With this form, individuals can provide information about managers within the business

Step 4: Upload 2 copies of all the necessary documents. The different documents required are:

Proof of ownership of business and place of business
Copy of documents like passport & election card of the owner(s)
Copies of customs and central excise authority issued a registration certificate
Xerox of last electricity bill and Property Tax bill of the place of business

Step 5: All these documents will be verified after submission. Further, a Gazetted Officer, Sales Tax Practitioner or an Advocate will verify these documents

Step 6: Post verification, an acknowledgement slip will be provided, which needs to be carefully maintained for future references

How to Pay for VAT Registration Fee in Gujarat Online?

Dealers and business owners need to visit the official portal of the Gujarat Commercial Tax department. They can follow the steps below to make Gujarat VAT payment online:

Step 1: Sign up by providing details like firm name, email id and PAN card details

Step 2: Select the option for online payment methods

Step 3: The dealer needs to enter details like office address, appropriate taluk sub treasury, bank details from where the net banking will be done, etc.

Step 4: The dealer will now need to click on the confirm button after inputting all the details

Step 5: Portal will redirect individuals to the bank page for online transaction

Step 6: Post completion of payment, the bank will generate acknowledgement along with transaction ID and challan identification number

How to File a Return Against the VAT Payment in Gujarat?

In Gujarat, dealers enjoy exemption in VAT taxes if their payment is more than Rs. 60,000 as per sections 40 and 41. Individuals can file for return against VAT payment in Gujarat with the following steps:

Step 1: Individuals need to login and register on the website.

Step 2: One must download the templates and duly fill them with appropriate data. These include Form 201, Form 201C, Form 203, and Form 204 and save on their devices.

Step 3: After saving the filled forms, one needs to upload them in .xls or .csv format.

Step 4: Post uploading, the individual can click on the generate acknowledgement to generate the slip.

How Is VAT Different From GST in Gujarat?

The Government of India implemented the GST or Goods and services tax on 1st July 2017. This tax has replaced central, and state taxes like VAT levied on business owners and dealers. Through GST, one only has to pay during the end stage of the product. However, in the case of taxes like VAT, the state government imposed these on every step of the production of the goods and products.

GST removes the cascading effect seen in VAT and is also the same for every state, unlike VAT. Moreover, registering and paying GST online is far easier than paying VAT.

Even though GST has replaced VAT in most cases, it is important to know about it as the dealers and business owners need to know about these taxes while making payments during production. This was all the information related to VAT in Gujarat.

Frequently Asked Questions

✓ What is the petrol VAT rate in Gujarat?

The rate of VAT levied on petrol in Gujarat is Rs. 15.56 per litre (% of (fuel price charged to dealers + excise duty + avg. Dealer commission).

✓ What is the rate of VAT levied on Diesel in Gujarat?

The percentage of VAT levied on diesel in Gujarat is 25%.

✓ Are there any products or goods on which the Gujarat government has exempted VAT?

Yes, there are certain products on which the government has exempted VAT. Further, the government states this in Schedule I, and these goods include:

Agate stones and products made from agate stones
Agricultural tools like huller, thrasher and opener
Braille equipment
Hearing aid
Crutches and more