VAT rates are levied on the sale of taxable products and services. These products and services are governed by certain schedules of the Karnataka VAT Act of 2003. Enumerated in these schedules is a list of products and services and the VAT rates applicable to their sale. Section 4 of the Karnataka VAT Act, for instance, not only specifies but also grants power to the state government to lower the tax payable. The power to increase VAT rates also rests with the state government. So far as Section 4 goes, here are the tax rates applicable:
| Schedule / Goods | Rate of Tax |
|---|---|
| Products in the Schedule 2 | 1% |
| Products in Schedule 3 | 5.5% |
| Products in Schedule 4 | 20% |
| Products not covered under any schedule | 14.5% |
| Manufactured tobacco goods such as gutkha, cigarettes and cigars | 20% |
| Declared products (defined under Section 14 of the Central Sales Act) | 5% |
Schedules 1 to 6 of the Act enumerate various products and services that will be subject to exemption. They also enlist the VAT rates that will be remitted and imposed on effecting a sale. A Revenue Neutral Rate of 14.5% will be charged for the taxation of unscheduled products and services. Unscheduled products and services are those that are not covered by any of the schedules of the VAT Act. Schedule 5 covers the Input Tax on restricted products and services. Schedule 6 covers the VAT rates for a different description of the works contract and if the description of said works contract is not covered under any category then it will be liable to a VAT rate of 14.5%.
Karnataka VAT Registration:
Every dealer who engages in the trade of products and services that come under the ambit of VAT must register themselves prior to the commencement of trade. The registration process is simple and hassle-free, requiring you to fill in the VAT Registration form (Form VAT – I). You must provide all personal details such as name, date of birth, an amount paid, nature of a business, etc. So far as the business is concerned, details such as address, directors or partners, if any, PAN details, date of incorporation, turnover, account details and TIN must also be provided. The VAT Registration form will be closely perused by the relevant authorities to check if all relevant eligibility criteria are met before they give you a registration certificate.
Registration is mandatory for all dealers who have a turnover in excess of the threshold determined by the government of Karnataka. If the taxable turnover of a dealer exceeds Rs.10 lacs during the course of a financial year, or if the taxable turnover exceeds Rs.83,330 in any one month of the financial year, registration is compulsory.
Karnataka VAT Return e-filing and Payment:
Individuals who want to file their VAT returns can do it online by visiting the Karnataka Commercial Taxes Department’s official website. You will first have to register yourself after which you can visit the appropriate link to file returns for any particular period. All you have to do to file your returns online is to download the relevant VAT returns form, fill in the required details, and submit it as per your convenience.
The website can also be used to make online payments. Once you have registered with the website, you can simply login with the verified credentials and opt to pay either via debit/credit card or net banking. Once the payment has been made, you will receive a Unique Reference Number that can be used for further communication.
