VAT in Gujarat: Rates, Returns & Payment

Last Updated at: Oct 15, 2020
vat gujarat
Over the last four years, revenue from VAT levied on petrol and diesel by the state government rose from Rs 8,819 crore over 2015-’16 to Rs 14,001 crore in 2018-’19, the state government announced at the state assembly.


Please Note: VAT does not apply any more. Kindly refer to GST Registration instead.

Gujarat has implemented value-added tax much like the rest of India, raising VAT on goods it wishes to reduce consumption of and increase it on those it wishes to increase consumption of. For example, the VAT rate on cigarettes is up to 45%, while VAT on micro-irrigation tools, raw materials for incense sticks, sharpeners, pencils, etc. remain totally waived.

Applicability of VAT in Gujarat

Section 3 of the Gujarat Value Added Tax Act, 2003 provides for levy and imposition of VAT and the conditions laid down therein.

Imposition of VAT depends on the following:
1. Total turnover during the year immediately preceding the appointed day;
2. Taxable turnover (collectively referred to as thresholds of turnover);
3. Registration of a dealer.

As per the amended Act, VAT is applicable, if:
1. The turnover is more than 5 lakhs
2. The taxable income is Rs. 10,000 or more

All such dealers must apply for both VAT Registration and Central Sales Tax.

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VAT rates in Gujarat and Exemptions

VAT rates in Gujarat depend upon transactions carried out and also on the kind of goods dealt with in the business.

Some goods are completely exempt from VAT. They are as follows:
1. Any sale or purchase of any goods where such sale or purchase takes place:
a) In the course of interstate trade or commerce; or
b) Outside the State; or
c) In the course of the import of goods into or export of goods out of the territory of India,
2. The goods specified in the Schedule I shall be exempt from tax. The goods are those used by handicapped, books and stationary, micro agricultural goods, and so on.
3. Sale of goods to a developer situated in a special economic zone or to an undertaking in the special economic zone.
4. The state government may, if it considers necessary so to do, in the public interest, issue a notification in the official gazette.

Other than these goods, the tax rates, are divided into three broad categories, and they are given in the schedule 1, 2 and 3 of the VAT Act.

The rates, as per the schedules are as follows:
1. Schedule–1: Gives a detailed account of those goods which does not fall under the category of VAT -– or exempted from VAT.

2. Schedule–2: A bevy of different rates depending upon the goods given under the category, such as bicycles, periodicals and journals, electricity.

3. Schedule–3: A list of different tax rates, depending upon the goods specified such as the sale of aviation fuel, diesel (high speed), and so on.

VAT Payment in Gujarat

The cycle for payment of VAT depends on the type of goods. Dealers who fall under the Schedule–3 of the VAT Act (importers, exporters and dealers) or have a payment of more than Rs. 60,000 as VAT in the current or previous year, as well as dealers in SEZs and those dealers having refunds or remission under Section 40 or 41, need to pay VAT monthly.

The others can pay VAT in a quarterly cycle, and according to the due date set by the government.

Also, apart from the monthly and quarterly payments, the dealers need to file an annual return for assessment purposes, and the due dates are as follows:

For dealers with less than Rs. 1 crore turnover: June 30th
For dealers with more than Rs. 1 crore turnover: December 31st

VAT in Gujarat can be paid both offline and online, through the Gujarat commercial Tax website.

Online Payment of VAT
Enter your details on the Gujarat Commercial Taxes website. You will be asked to fill in various details regarding the company, such as the address, phone number, Email ID, and the Taluk and district under which your firm is operating.

When you fill in the details, and confirm the same, you will be redirected to the bank kiosk to make the payment.

When paid, the site will generate an acknowledgement copy, with both the transaction ID and the challan identification number.

Offline Payment
VAT in Gujarat can also be paid offline, through specified banks across the state. One need to visit the VAT office, with all details, and a ‘Counter Payment’ can be made in person.

For physical payments, too, one needs to first register on the website, and file tax. A challan or pay-in slip is generated once the process is complete. Using the challan, the payments can be done at specified banks over the counter.

All modes of payment, in cash, cheque or demand draft, are accepted as physical filing/payment of VAT. All three documents, the acknowledgement received from the bank, from the commercial website for filing returns and also the pay-in slip generated online, need to be submitted to the circle office for the offline VAT payment process to complete.

VAT filing in Gujarat

Depending upon the Goods as well as the amount of VAT to be paid, the payment of VAT varies in Gujarat.

Accordingly, monthly VAT returns are to filed by:

1. Dealers of Schedule III goods
2. Importers & Exporters
3. Dealers with more than Rs. 60,000 VAT payment in current or previous years
4. Dealers having remission or refunds under Section 40 or 41
5. Dealers who are exempt from VAT
6. Manufacturers/Sellers of SEZs

Quarterly VAT payments are to be filed by:
1. Businesses who pay a lump sum tax (VAT)
2. Dealers with less than Rs.60,000 VAT

Apart from monthly and quarterly returns, an annual return of VAT needs to be filed by June 30th, if the turnover for the financial year is less than Rs. 1 crore, and by Decepmer, 31st, for those businesses who has a turnover of more than Rs. 1 crore.

Gujarat allows VAT filing to be done through their authorized website, online.

The Due date for the VAT filing are as follows:
1. For monthly VAT payments: Within 22 days from the end of the earlier month.
2. For quarterly payments: Within 22 days from the end of the quarter for which the payments are to be made.

However, an exception is given to those dealers who fall under Schedule III of the VAT Act. All those dealers, whose Goods fall under Schedule III need to pay their VAT within 12 days from the end of the month.