Value-added taxation in India

Value-added tax (VAT) was introduced into the Indian taxation system from 1 April 2005. The existing general sales tax laws were replaced with the Value Added Tax Act (2005) and associated VAT rules.

A few states (Gujarat, Tamil Nadu, Rajasthan, Madhya Pradesh, Chhattisgarh, Jharkhand, Uttarakhand and Uttar Pradesh) opted to stay out of VAT taxation system during the initial introduction of VAT but adopted it later.

As of 2 June 2014, VAT has been implemented in all the states and union territories of India except Pondicherry, Andaman and Nicobar Islands and Lakshadweep Island.

VAT was replaced by Goods and Services Tax, all over India from 1 July 2017.

Gujarat
The Government of Gujarat had pass the "Gujarat Value Added Tax Act, 2003" (Act) in 2003 and specified that the date of implementation (appointed date) of the same would be notified later. Accordingly, the Government of Gujarat has vide notification no. GHN – 14/VAT-2006/S.1.(3)(1)-TH dated 29 March 2006 notified that the appointed date for implementation of VAT regulations in the State of Gujarat shall be effected from 1 April 2006.

However "The Central Sales Tax Act, 1956" (Central Act) which levies sales tax on inter-state sales is still effective and all inter state sale and purchase transactions effected after 1 April 2006 in the State of Gujarat shall continue to be subject to levy central sales tax as applicable earlier.

In Gujarat, "DVAT" Act 2003, will merge three existing state taxes:

Gujarat Sales Tax Act, 1956

Bombay Sales of Motor Spirit Taxation Act, 1958 Gujarat Purchase Tax on Sugarcane Act, 1989

Rates under VAT:

The Gujarat Value Added Tax Act, 2003 - Schedule

Maharashtra
The system of Value Added Tax (VAT) has been implemented, in the State of Maharashtra, w.e.f. 1 April 2005. Every dealer, who becomes liable to pay tax under the provisions of MVAT, shall apply electronically for registration, within 30 days from the date of such liability. VAT is implemented by Department of Sales Tax. Their site address is: [http://mahavat.gov.in Department Of Sales Tax - Govt. of Maharashtra]

Rate of tax:

Schedule ‘A’ – Essential Commodities (Tax free) - Nil

Schedule ‘B’ – Gold, Silver, Precious Stones, Pearls etc. - 1.2%

Schedule ‘C' – Declared Goods and other specified verry goods - 6% (Rates for items other than declared goods changed to 6%)

Schedule ‘D’ – Foreign Liquor, Country Liquor, Motor Spirits, etc. - 20% and above

Schedule ‘E’ – All other goods (not covered by A to D) - 13.5% with EFF CT from 17.09.2016

Delhi
DVAT 2004 as amended by DVAT 2005 and DVAT Rules 2005 came into force w.e.f. 1 April.,2005. It repealed Delhi Sales Tax Act 1975, Delhi Sales Tax on Works Contract Act, 1999, Delhi Sales Tax on Transfer to Right to use Goods Act 2002 and Delhi Tax on Entry of Motors Vehicles into Local Areas Act 1994.
 * Value-added tax depends on the product and services.

Jammu & Kashmir
Value added tax for the state Jammu & Kashmir includes multiple products such as cooked food, saffron, honey, electrical items, textile items such as durries, quilts, Pashmina wool etc. Apart from the applicability of VAT, the govt also made some exemptions on basic food items, industrial units, hotel, and farming equipment.

Kerala
The Kerala Value Added Tax Act (KVAT) 2003 was the governing act for Value Added Taxes in Kerala. Kerala Value Added Tax (Act 30 of 2004) came into force on 1 April 2005.