Skip Navigation LinksHome > Taxation System in India > Sales Tax/VAT

Sales Tax/VAT

Sales tax is levied on the sale of movable goods. Most of the Indian States have replaced Sales tax with a new Value Added Tax (VAT) from April 01, 2005. VAT is imposed on goods only and not services and it has replaced sales tax. Other indirect taxes such as excise duty, service tax etc., are not replaced by VAT. VAT is implemented at the State level by State Governments. VAT is applied on each stage of sale with a mechanism of credit for the input VAT paid. There are four slabs of VAT:

1) 0% for essential commodities
2) 1% on bullion and precious stones
3) 4% on industrial inputs and capital goods and items of mass consumption
4) All other items 12.5%
*Petroleum products, tobacco, liquor etc., attract higher VAT rates that vary from State to State

A Central Sales Tax at the rate of 4% is also levied on inter-State sales and would be eliminated gradually.

Municipal/Local Taxes
Octori/entry tax: Some municipal jurisdictions levy octori/entry tax on entry of goods
Maharashtra Value Added Tax Act 2002 came into force w.e.f. 1st April, 2005 to usher in the progressive value added tax system in place of the old sales tax system. VAT is a progressive and transparent system of taxation which eliminates the cascading impact of multiple taxation through a multipoint taxation and set-off principle. It promotes transperancy, compliance and equity and therefore, is both dealer friendly and consumer friendly. VAT being a multi point tax, envisages an increase in the number of dealers and is based on the concept of self-assessment and self-compliance. It is therefore inevitable that the Sales Tax Department transforms itself into a dealer friendly, focussed and dynamic department to cater to the ever increasing expectations of both the Government and the Trade & Industry.
Tax Calendar

Month
Due Date
Month
Due date
April 21st May May 21st June
June 21st July July 21st August
August 21st September September 21st October
October 21st November November 21stDecember
December 21st January January 21st February
February 21st March March 21st April
Audit report by C.A. by 30th November

    Source: Department of Sales Tax, Maharashtra