VAT in Himachal Pradesh: Rates, Eligibility, Registration Process & Fee

The VAT in Himachal Pradesh was passed in 2005, and the Himachal Pradesh VAT Act regulated its implementation. Moreover, the Excise and Taxation Department in Himachal Pradesh is responsible for collecting its state revenues through levies, duties and taxes.

Further, Section 62(5) of the Himachal Pradesh VAT Act allows dealers and manufacturers to avail of incentives on taxes if the state government has declared those incentives before implementing the VAT act.

Through this blog, individuals will learn more about the Himachal Pradesh VAT rules and regulations.

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What Is Value Added Tax?

In India, VAT or the Value Added Tax was imposed during the early 2000s. However, after the introduction of GST (Goods & Services Tax) in 2017, it replaced VAT and other indirect taxes in India.

Value Added Tax is an internationally accepted tax system which is indirect. Every state government had different VAT rules as its execution was under the state government, not central. It has cascading effects on the economy and taxes. Moreover, it was a multi-point tax system, so the sellers transferred the liabilities to the buyers to pay for VAT.

What Are the VAT Rates for Goods or Services in Himachal Pradesh?

VAT rates in Himachal Pradesh are charged separately for different products and services. The VAT act splits them into different categories or schedules. These are as follows:

Schedules	Applicable Goods or Services	Himachal Pradesh VAT rates
Schedule A	Part 1- Gold, silver, other precious metals, precious stones and jewellery thereof. Aviation Turbine Fuel, as stated under entry (iid) of Section 14 of the Central Sales Tax Act, 1956 (Act No. 74 of 1956).	1%
	Part 1A- Sales made from Canteen Store Departments to military/ex-military. Machinery sold to hydro-power units.	2%
	Part 2- Edible oil, flour, besan, sooji, etc	4%
	Part 2A- Agricultural tools which are not manually implemented	5%
	Part 2AA- Footwear, Hawaii chappals, straps and more	9%
	Part 3- All goods, excluding the ones included in Part 1, Part 2 and other schedules	13.75%
Schedule B	Animal driven or manually implemented agricultural tools, Animal feeds, bangles, bread, books, charcoal and more	0%
Schedule C	Taxable at every point of purchase like resin, Khair, Eucalyptus tree, etc.	12.5%
Schedule D	Taxable under Section 6(1) like diesel and motor-spirit	Taxable at 25%, 9.7%, 1%, 12.5% according to Section 6 (1) of the Himachal Pradesh VAT Act.
Schedule E	Tobacco and tobacco derivate, beedies.	36%, 22%

Who Should Pay VAT in Himachal Pradesh?

The following people are liable to pay VAT according to the Himachal Pradesh VAT Act:

All dealers and business owners who import goods from outside of Himachal of any value
Any manufacturer or dealer who manufactures their goods for sales exceeding above Rs 2 Lakhs
Hotel, Restaurants, Bakery owners or like of them whose taxable quantum exceeds Rs 2 Lakhs
Any dealer whose taxable quantum surpasses Rs 6 Lakhs

How to Register for VAT in Himachal Pradesh Online?

The above-mentioned business owners are eligible to pay taxes in Himachal Pradesh. Moreover, individuals can make VAT payments through online payment methods. To register online for VAT payments in Himachal Pradesh, individuals can follow the steps below:

Step 1: Log in to the official website of the Department of Taxes and Excise of the Government of Himachal Pradesh

Step 2: Navigate to the e-registration portion and then click on it

Step 3: Once an individual reaches the e-registration page, one should choose VAT registration and then click on “Next”

Step 4: A new page containing the VAT registration form will open. Individuals need to fill these forms duly. In Himachal Pradesh, business owners need to fill out the following forms:

FORM VAT-I: This form, however, has a few sub-parts like:
- Business-Activity-Commodities
- Bank Details
- Annexure I, II, III,
FORM VAT-II: Challan
FORM VAT-III: Personal Bond with solvent sureties
FORM VAT-IV: Certificate of Registration (General/VAT Registration)
FORM VAT-V: Register of dealers registered
FORM VAT-VI: Register of persons registered
FORM VAT-VII: Indemnity Bond

Step 5: After filling up the form, the business owner needs to upload the filled form on the portal itself in .xls, .xlsx, .xlsm or .zip file format

Step 6: Business owners also need to submit information like their business email id, PAN number and district

Step 7: Post completion of information, one needs to click on submit

Step 8: Individuals might receive an acknowledgement number or slip for future use during payments, etc

How to Pay for VAT Registration Fee in Himachal Pradesh Online?

To make VAT registration fee payment online, individuals need to follow the steps below:

Step 1: Post submission of registration request for VAT payments through the official portal business owners need to click on e-Payment on the main page

Step 2: Submit the acknowledgement number if asked

Step 3: Choose a specific bank and enter bank details and other information that they ask

Step 4: After clicking on submit, the website will redirect the individual to the bank page to make payments

Step 5: Again, the dealer can receive an acknowledgement slip after successfully making the payments

How to File a Return Against the VAT Payment in Himachal Pradesh?

Business owners who want to e-file their returns against VAT payments should follow the steps stated below:

Step 1: Once an individual is in the official portal, one needs to click on the e-returns option

Step 2: Since it is for registered users, so the individual now needs to provide a login id and password

Step 3: After providing the id and password, one needs to click on the “login” option

Step 4: Now, one needs to download the return form and duly fill it with proper information

Step 5: Submit it on the official portal itself

How Is VAT Different From GST in Himachal Pradesh?

Goods and Services Tax has bought the taxation system of this country under its policy of “one nation, one tax”. As a result, its rise has replaced the use of indirect tax like Value Added Tax or VAT.

There are some differences between GST and VAT. For example, in GST, an individual has to pay at the end stage of a product. However, in the case of VAT, the State Government levies these taxes at every stage of production of services and goods. Moreover, GST rates are similar across states, unlike VAT.

This is all about VAT in Himachal Pradesh. Even though GST has replaced it in most cases, it is still important to be aware of it, so business owners can be informed while making payments.

Frequently Asked Questions

All

Will farmers in Himachal Pradesh have to pay VAT to the state government?

No, in Himachal Pradesh, farmers do not have to pay any VAT. Additionally, most agricultural tools are exempted from paying any taxes.

What is the VAT rate in India?

The Standard Rate for Value Added Tax in India is 12.5%.

What is the amount of VAT levied on petrol in Himachal Pradesh?

The amount of VAT levied on petrol in Himachal Pradesh is ₹13.93 per litre {17.5% of (fuel price charged to dealers + excise duty + avg. dealer commission)}.