The Value Added Tax in Kerala is implemented under the guidelines of the Kerala Value Added Tax Act. Further, when many states refused to implement VAT, Kerala had already started its implementation in 2003. A few states initially opposed this tax because it is a regressive tax and burdens low-income consumers unnecessarily.
This blog will discuss in detail what is VAT in Kerala and its elements like registration procedure, fees, etc.
Value added tax or VAT is a goods and services tax levied on the ultimate sales of those products to the consumers. Moreover, this tax is imposed on every stage where value is added. This includes the initial production stage to the point of sale. Furthermore, the VAT is under the purview of state governments in India.
As VAT is a multipoint goods and services tax, the sellers or producers can pass on the liability to pay for it to the consumers. Additionally, the Kerala VAT Act has certain rules and regulations regarding rates and registration specific to that state.
Kerala VAT rates are divided into four categories or schedules. These schedules are explained in a tabular format below:
Schedules |
Applicable Goods or Services |
VAT Tax Rate in Kerala |
Schedule I |
Manually operated agricultural tools |
0% |
Aids for disabled people like hearing aids and etc |
||
Coconut, fresh fruits and vegetables |
||
Schedule II |
Precious stones and metals, semi-precious stones |
1% |
Rice, edibles oils and flour (wheat, corn, maize, rice) |
||
Schedule III |
Utensils, bakery tools and products, casting iron |
5% |
Goods and services not included in any schedule |
Cigars and Cigarettes |
13.5% |
Some other products that have higher VAT |
Plastic bags and Aerated drinks |
15% |
Branded aerated drinks and plastic handbags |
20% |
|
Tobacco derivatives and PAN masala |
22.5% |
Individuals who should pay Value Added Tax in Kerala are as follows:
According to Kerala VAT Act, all eligible dealers and business owners should register their business for VAT payments. They can do so through both online and offline modes. However, registering online makes the procedure far more convenient, and business owners outside Kerala who have businesses in this state can register without any hassle.
Following is a step-by-step guide on how to register for Kerala VAT online:
Step 1: Visit the official portal of the Kerala commercial tax department
Step 2: Select the e-Registration tab below on the screen
Step 3: Applicants need to enter details like application type, district, list of value, office name, business PAN, the constitution of business, login name and password
Step 4: Individuals need to fill up certain forms based on their requirements. These forms include:
Step 5: Applicants need to submit documents like:
Step 6: After filling up all this information individual need to click on “Save Changes”
Step 7: Applicants will be provided with VAT registration number after verifying all documents which they need to save for future reference
Applicants can pay a VAT registration fee in Kerala through online modes. One needs to follow the steps below:
Step 1: Individuals need to register their business first. After that, they can log in to their account on the official portal and then move to the payments section
Step 2: In the payments section, business owners must choose an online payment method like net banking
Step 3: From the official portal, the individuals will be redirected to the net banking page of the bank
Step 4: In this stage, individuals need to enter their bank details and the transfer the fee amount
Step 5: Post completion of payment, the portal will present an acknowledgement slip which the business owner/dealer needs to preserve for future reference
Dealers and manufacturers operating in Kerala or residing in the state must file periodic and annual VAT returns in Kerala. Dealers who pay Rs 10 lakhs VAT can file for return against VAT payments. These dealers should file for returns before the 15th of each month.
In contrast, dealers who pay VAT of more than Rs 25,000 but less than Rs 10 Lakh are required to file their VAT returns on or before the 20th of every month. Further, dealers who do not fall under either of these categories should have their VAT returns filed on or before the 25th of each month.
Additionally, all business owners should file annual VAT returns on or before 30th April for every financial year. Following are the steps to file for VAT returns in Kerala through an online medium:
Step 1: Business owners need to login to the official website of Kerala Commercial Taxes department
Step 2: If the individual is entering the website for the first time, one might be asked to change password
Step 3: Dealers need to download the Form 14D in pdf format
Step 4: After downloading the form, one needs to fill it with applicable information duly
Step 5: Upload the duly filled form in .xlm format
Step 6: Post uploading the form, the business owner needs to generate an acknowledgement slip
GST is a goods and services tax, and it has replaced the indirect tax formats like VAT from most states in India. GST is advanced and has a “one nation, one tax” policy. Moreover, replacing VAT has eliminated the cascading effect on the country’s economy. Similarly, in Kerala, like most other Indian states, the GST is charged instead of VAT for most commodities.
The e-filing for returns and registration process for GST is the same for every state. Unlike VAT, which is under the jurisdiction of state governments, each state government has a different rule.
This blog has discussed the rates, registration process and e-filing for returns for Value Added Tax in Kerala.
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Disclaimer: This information is added only for informative purposes and collected from different sources across the Internet. Digit Insurance is not promoting or recommending anything here. Please verify the information before making any decisions.
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