Amount (in Rs) Return Filling
Less Than 100000 Six Months
Above 100000 Quarterly
Above 1000000 Monthly


However, most of the states in India, from April 01, 2005, have supplemented the sales tax with the new Value Added Tax (VAT). VAT in India is classified under the following tax slabs:

  • 0% for the essential commodities
  • 1% on gold ingots as well as expensive stones
  • 4% on capital merchandise, industrial inputs, and commodities of mass consumption
  • 12.5% on all other items
  • Variable rates (depending on state) are applicable for tobacco, liquor, petroleum products, etc.

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

VAT has been imposed on various states such as Andhra Pradesh, Maharashtra, Madhya Pradesh, Orissa, Kerala, Tamil Nadu and Rajasthan. The present VAT structure provided by the government is not turned out to be a foolproof formula hence central government keeps on removing it sometimes due to the agitation of the manufacturer and dealer. VAT is not a standard denomination in all the states it is varied in different part of the country. On an average there are two average tax slabs the first one is 4% that covers all the essential items where as the second slab consist of 10% that covers all the luxury items. There are two sub slabs also that is 1% for jewellery and 20% for non-essential goods.