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

Value Added Tax or VAT was introduced on 1st April 2005. The primary objective of this tax is to promote transparency in the taxation system and lower trade barriers and the rising effects of taxes. This blog focuses on VAT in Karnataka and its related crucial details that you must learn before proceeding to pay the same.

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What Is Value Added Tax?

A VAT is imposed on the sale of products and services, and producers of such items pay the tax to the Government. As far as the VAT in Karnataka is concerned, the Karnataka VAT Act came into effect in 2003. It contains provisions depending on which VAT will be imposed within Karnataka.

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

VAT rates in Karnataka are imposed under four categories. The categories, tax rates and commodities or services on which VAT is applicable are illustrated in a tabular format below:

Schedules	Applicable Goods or Services	VAT Rates in Karnataka
Schedule II	Bullion, precious metals and stones, and gold	1%
Schedule III and VI	Rates may vary depending on the type of work contract. However, this may include works related to producing hosiery goods, utensils, bricks, and readymade garments.	4%
Schedule IV	Molasses and narcotics	20%
Products that are not included in any schedule	-	14.5%
Declared products as explained in Section 14 of the Central Sales Act	-	5%

Who Should Pay VAT in Karnataka?

Dealers who earn a taxable turnover above ₹ 10 lakhs in a financial year or above ₹ 83,330 in any one month of a fiscal year qualify for registration for VAT payment in Karnataka.

How to Register for VAT in Karnataka Online?

Eligible dealers must request registration under VAT Act through the official website of the Commercial Taxes Department, Government of Karnataka. Mentioned below is the step-wise guide:

The online registration form is divided into six sections:

Part (A)
Part (B)
Bank details
VAT3
VAT4
Upload the necessary documents

Part (A)

Step 1: After visiting the official portal of the Commercial Taxes Department, 'select e-Registration'. Choose your type of registration – casual, non-resident, or resident.

Step 2: Choose an appropriate LVO office. Choose your business status from the list and type in your name.

Step 3: Provide the number of partners associated with your firm and other information in VAT 4 form in case of an unregistered or registered partnership business firm. Besides, if you have filed a partnership deed, click on 'Yes' or 'No'. In the case of HUF, enter the number and information about all the members in VAT 4. Provide the date of incorporation and the name of the trust or society associated with your business.

Step 4: Enter personal details such as your date of birth, parents' names and business-related information such as trade name, service tax or central excise registration number and PAN. Additionally, enter your contact details correctly.

Part (B)

Step 5: Provide both permanent and temporary residential addresses and select a district. Choose 'Outside Karnataka' if you reside in an area outside Karnataka.

Step 6: Choose a statutory authority under whom you have filed a registration. If the authority is not listed in this form, click on 'others' and provide a description of the concerned authority.

Step 7: Enter other details like business type, date of initiation of your business, registration type, etc.

Step 8: If you wish to register under CST Act or KTEG Act, select 'Yes' and enter the necessary details.

Bank Details

Step 9: After completing this step, provide your bank-related details such as bank name, IFSC code, branch name, bank account type, etc.

VAT 3

Step 10: Under this section, enter TIN (if a corporate entity is applying for a different TIN), trade name, and address of your business place.

VAT 4

Step 11: Submit details of partners of your business firm and members of AOP. Provide the details of member partners like names, address details, etc.

Upload the Necessary Documents

Step 12: Upload scanned documents such as photographs, certificates of the licence, and address proof of your business location.

After successfully submitting the registration form, you will get an ERN or e-registration reference number. Keep this number for future reference and further communications with CTD.

How to Pay for VAT Registration Fee in Karnataka Online?

You can pay this VAT registration fee of ₹ 500 online. All you need to do is follow a few simple steps:

Step 1: After submitting a registration request for VAT payment in Karnataka through the official website of CTD, select 'e-Payment of Reg. Fee' on the main page. Provide the ERN and date. Hit on the option 'Go.'

Step 2: Now, choose a bank and enter other details to proceed.

After clicking on the 'Submit' button, you will get a reference number and keep this number for future uses.

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

You can file your return against the VAT payment in Karnataka online. Follow the steps mentioned below:

Step 1: Visit the same website of the Commercial Taxes Department of the Government of Karnataka. Select an appropriate e-filing option to proceed.

Step 2: Download the return form, provide the necessary information and submit it to the appropriate authority.

How Is VAT Different From GST in Karnataka?

VAT is an indirect tax that is imposed on the sales of goods and services. Consumers pay these taxes while purchasing such items or services but through the producers to the Government. The collection of VAT is under the responsibility of a State Government and enforces its authority over it.

However, with the implementation of GST or Goods and Service Taxes on 1st July 2017, this system of indirect taxation changed a bit. GST replaced the system of VAT in Karnataka and other states in India. Unlike VAT, GST rates are similar for every Indian state. Moreover, the Central and State Governments collect the GST, and tax amounts are then shared between the two Governments.

This is all about VAT in Karnataka. Knowing its basic details is essential to avoid any hassles while paying it to the relevant authority.

Frequently Asked Questions

All

Who levies VAT in Karnataka?

The Commercial Taxes Department of the Karnataka Government is responsible for levying VAT on goods and services in the state.

How often should you pay Value Added Tax in Karnataka?

You must pay VAT quarterly in Karnataka.

Where can you check the VAT registration status in Karnataka?

You can check the VAT registration status online through the official website of the Commercial Taxes Department by entering the appropriate date and e-registration reference number.