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VAT in Jammu and Kashmir: Rates, Eligibility, Registration Process & Fee

Value Added Tax or VAT was introduced on 1st April 2005. The purpose of introducing this new taxation system was to reduce tax evasion and promote a simpler and more transparent taxation process.

This blog focuses on VAT in Jammu and Kashmir and all relevant details one must remember to pay Value Added Tax on time.

Team Digit

What Is Value Added Tax?

Value Added Tax is a form of indirect tax levied on goods and services which is payable at each level of the supply chain. Every individual, from the manufacturer to the retailer, must pay this tax to the Government of India. Further, VAT is calculated as the difference between output and input taxes. These rates vary from state to state based on the transaction of goods and services.

The Jammu and Kashmir Value Added Tax Act was implemented on 3rd April 2005. It applies to all businesses, trade, manufacturers and commerce within the jurisdiction of Jammu and Kashmir territory.

What Are the VAT Rates for Goods or Services in Jammu and Kashmir?

Jammu and Kashmir VAT Act levied taxes on goods and services under four schedules. The VAT rates charged for each schedule are mentioned in the table below.

Schedules	Applicable on Goods or Services	VAT Rates in Jammu and Kashmir
Schedule A	57 categories of goods, including manually and animal-driven agricultural equipment, tractors, implements and aids for disabled individuals, khadi garments and goods, aquatic, poultry and cattle feed and many more.	0%
Schedule B	Gold, Platinum, silver ornaments, precious stones and bullions.	1%
Schedule C	195 categories of goods like acids, writing ink, liquors and beverages, carpets, biomass, candles, coal castor oil, all types of utensils, bed sheets and many more.	5%
Schedule D 1	165 categories of goods such as grinding stones, methyl alcohol, all kinds of adhesive, air conditioners and air conditioning appliances, baking powder, items made of ivory and tusk, vinegar, batteries, cinematographic instruments, clipboards and many more.	13.5%
Schedule D 2	6 categories of goods like cigarettes, cigars, smoking pipes, and many more.	40%

Who Should Pay VAT in Jammu and Kashmir?

All dealers whose gross turnover is more than ₹ 1 lakhs are qualified to register as VAT payers.

How to Register for VAT in Jammu and Kashmir Online?

Eligible dealers must register through the official website of the Sales Tax Department of Jammu and Kashmir. Here are the procedures one must follow to register online:

Step 1: After visiting the website, click “New user-sign up”.

Step 2: A new screen opens for you to enter the mandatory information.

Step 3: Enter the following details in the online form -

TIN
Effective Date of Registration
PAN No.
Firm Name
Principal Place of Business
Constitution on Business
Enter Land Number
Cell Number 1
Cell Number 2
Email Id
Password
Select a security question
Security answer

Step 4: Read the terms and conditions and click “I accept the terms”.

Step 5: Click back to return to home page.

Step 6: Click “Submit” to register.

If you receive, “You have been successfully registered. Your login id is: xxxxxx." Your registration process is complete. Now you can log in with your credentials. Further, the dealer can log in with his/her registered TIN.

How to Pay for VAT Registration Fee in Jammu and Kashmir Online?

After completing the registration on the official website, follow the steps to pay the VAT registration fees-

Step 1: Select the e-payment option from E-Services in the right-hand side corner of the home page.

Step 2: Fill in the details as mentioned in the challan form.

Step 3: Click Confirm.

Step 4: The system will ask you to verify the data; click submit.

Step 5: You will be redirected to the selected bank’s portal.

Step 6: Enter your net banking credentials.

Step 7: Your challan will be displayed as it is

Step 8: Verify your details and click “Confirm”.

Step 9: Proceed with the payment in the bank portal.

After the payment process is completed, a payment confirmation message will show up along with a Unique Reference Id and acknowledgement slip. Then you will be redirected to the Sales Tax Department of Jammu and Kashmir’s homepage. Your unique bank reference number and CIN number will appear on the screen.

Further, one can view the e-payment transaction details through “View e-payment.”

How to File a Return Against the VAT Payment in Jammu and Kashmir?

You can file the return against VAT in Jammu and Kashmir online with these simple steps:

Step 1 - From the official website, click on “e-services” and select e-returns.

Step 2 - Enter the necessary details.

Step 3 - Return to the “e-payment” under the “e-services” on the homepage.

Step 4 - Submit your credentials, after which you will receive a reference and id password for further communications.

How Is VAT Different From GST in Jammu and Kashmir?

VAT is an indirect tax which is imposed on the payable goods. Since they vary from each state, VAT is affected by state laws. Therefore, keeping track wasn’t easy.

On the other hand, Goods and Service Tax or GST, introduced on 1st July 2017, changed the indirect taxation process. This form of taxation unified the nation under three broad categories of taxes, namely- CGST, SGST and UGST.

Differences of VAT & GST in Jammu Kashmir

Although VAT has ceased functioning in most Indian states, the Jammu and Kashmir VAT Act is still imposed on petrol. This affects the dealer’s commission and petrol prices.

While GST came into action in Jammu and Kashmir after a few days of its nationwide implementation. Section 22 of Central Goods and Service Taxes exempted Jammu and Kashmir due to the “Special State” status as payers of CGST. Thus, only SGST applied to them.

The Jammu and Kashmir Reorganisation Act, 2019 divided the state into two Union Territories of Jammu & Kashmir and Ladakh. Therefore, the removal of special status led to the implementation of GST as follows:

Jammu Kashmir Goods and Service Tax will apply to the newly formed Union Territory of Jammu and Kashmir.
Union Territory Goods and Service Tax will apply to the Union Territory Ladakh.

Thus, replacing the VAT in Jammu and Kashmir for most of the state.

Value Added Tax (VAT) was complex for a commoner to understand or calculate. To avoid the evasion of taxes, every individual must be conscious of VAT. Therefore, GST was introduced as a common tax for the entire nation. Unlike VAT, GST eliminates the multi-layered taxation process, tackles corruption, and eases business in India.

Frequently Asked Questions About VAT in Jammu & Kashmir

All

When to file VAT returns?

One must file VAT Returns 30 days before the quarter ends.

Where to e-register for VAT in Jammu and Kashmir?

You must register yourself on the official website of the Sales Tax Department of Jammu and Kashmir.

What information is needed to register for VAT in Jammu and Kashmir?

To register for VAT in Jammu and Kashmir, one needs to provide his or her business contact details, bank account details, Unique Tax Reference Number and details of your turnover.

What is the primary difference between VAT and sales tax?

While sales tax is levied on only goods, Value Added Taxation or VAT is levied on both services and goods.

Which sales are not governed under VAT Act?

VAT Act remains applicable only to sales of goods and services within state and some sales are not governed by this act. These are - a) sales taken place outside state b) sales during import or export c) sales during inter-state commerce or trade, which is liable under Central-Sales-Tax-Act of 1956.