Value Added Tax (VAT) in India: Current Law, DVAT, CST, Registration and Rates
Value Added Tax (VAT) was a principal State-level tax on sale of goods before the introduction of Goods and Services Tax (GST). Since 1 July 2017, GST has replaced VAT for most taxable supplies. State VAT laws nevertheless remain relevant for goods and transactions that continue outside GST, and for legacy assessments, refunds, appeals and disputes relating to earlier VAT periods.
VAT and GST: what applies now?
GST created a destination-based indirect-tax system covering most supplies of goods and services. VAT continues only where the Constitution and applicable State legislation leave particular goods or transactions outside GST, and for pre-GST liabilities. Specified petroleum products are constitutionally capable of being brought into GST from a date recommended by the GST Council; until then, State taxes and the CST framework can continue to be relevant to those goods. Alcoholic liquor for human consumption is outside GST.
| Issue | Present practical position |
|---|---|
| Most goods and services | Governed by CGST/SGST or IGST, subject to exemptions and special rules. |
| Delhi VAT | Still relevant for goods/transactions within the continuing scope of the DVAT Act and for legacy VAT matters. |
| Central Sales Tax | The CST Act, 1956 remains on the statute book and continues to matter for inter-State sales falling within its present scope. |
| Old VAT registration limits and rates | Historical information only unless confirmed against the current State law, notification and commodity involved. |
Delhi VAT (DVAT)
The Delhi Value Added Tax Act, 2004 remains administered by the Department of Trade and Taxes, Government of NCT of Delhi, together with the Delhi GST framework and the Central Sales Tax Act. Businesses dealing in goods still covered by DVAT should verify registration, returns, rates, forms and notifications from the current Delhi tax portal before acting.
Existing DVAT guides on AapTaxLaw
Central Sales Tax (CST)
The Central Sales Tax Act, 1956 has not been repealed. Its present operation is narrower than before GST, but it remains legally relevant to qualifying inter-State sales and legacy proceedings. The following internal guides explain important CST provisions:
How to determine whether VAT or GST applies
First identify the goods or supply and the State concerned. Then check whether the item is presently within GST. If it is outside GST, verify the governing State VAT/sales-tax law, current rate notification, registration requirement and return procedure. For inter-State transactions, also examine whether the CST Act applies. For disputes concerning periods before 1 July 2017, the repealed or substituted operational provisions may still govern assessment, reassessment, refund, appeal, penalty and recovery for that historical period.
Registration, turnover limits and rates
There is no single current all-India VAT registration threshold or VAT rate that can safely be stated for all goods. The applicable rule depends on the commodity, State law and the period involved. GST registration thresholds are separately governed by GST legislation and notifications. Always confirm a current rate or threshold from the competent government source before filing a return, issuing an invoice or structuring a transaction.
Key takeaway
For current transactions, begin with GST law. Use VAT and CST materials only where the goods, transaction or historical tax period falls within their continuing legal scope. Older VAT pages remain useful for understanding statutory concepts and legacy proceedings, but current official notifications should control where the law or rate has changed.