Value Added Tax or VAT as is it commonly known has been in existence in the country for around a decade now, and is an indirect tax which removed the ambiguity of General Sales Tax. The Bihar Value Added Tax Act of 2005 contains the provisions for the implementation of VAT in the state. It aims to simplify and streamline the process connected to the levy of tax on purchase or sale of goods in Bihar and came into existence on April 1, 2005.
Bihar VAT Rates:
The VAT applicable on goods in Bihar varies according to the product, with Schedule 1, Schedule 2, Schedule 3 and Schedule 4 of the Act containing provisions for different rates. Goods under Schedule 1 attract no VAT, i.e. they are exempted and include agricultural products, charcoal, coconut fibre, milk products, vegetables, etc. These are considered basic for human survival and hence exempted. A total of 91 goods find mention in Schedule 1 in Bihar.
Goods and products under Schedule 2 of the Act attract VAT of 1% and include precious metals like gold, silver, gemstones, LPG, barley and pulses/wheat/flour sold by dealers with an annual turnover of over Rs 100 crores.
Goods and products under Schedule 3 of the Act attract VAT of 5% and include machine operated agricultural implements, intangible goods, bamboo, kitchen utensils made of brass/precious metals, bio fertilisers, candles, coffee beans, coal tar, tea, dry fruits, etc. A total of 150 products are mentioned under this Schedule.
Goods mentioned under Schedule 4 can attract VAT ranging from 20% to 50%, as per the restrictions imposed at a particular time. The items under this list are alcohol, including country liquor, natural gas, petro, diesel, aviation turbine fuel and tobacco products except those used to make bidi.
Goods which do not find a mention under either of these Schedules are charged VAT at the rate of 12.5% in Bihar.
Bihar VAT Registration:
Individuals who indulge in trade of goods and products which attract VAT should compulsorily register themselves before they can carry such trade related activities. A valid certificate of registration needs to be obtained in order for anyone to legally participate in sale of goods. Form A-1 of the Value Added Tax Act of 2005 entails provisions for registration.
Individuals who wish to register should fill up this form, providing details like their name, nature of business, legality of business, number of branches, immovable properties owned by the business, bank account and contact details, PAN and details of goods sold by an individual, among others. Post verification by competent authorities, an individual will be provided a certificate.
Bihar VAT Forms:
The Bihar Value Added Tax Act of 2005 provides provisions for various forms, hoping to simplify VAT registration, collection and distribution, with special forms for every purpose. There are close to 80 forms under different headings, each fulfilling a particular requirement. The most important forms are A-I, which is to register your business, A-VIII which is to apply for a refund, B-I which is the security Bond, C-II which is for the Tax Deducted at Source and VR-IV which is for tax returns. An individual can opt for a form depending on his/her immediate requirement, with an option to download them from the official website of the Commercial Tax Department of Bihar.
Bihar VAT Return e-Filing and Payment:
Individuals who wish to e-file their VAT returns can do so online, through the official website of the Bihar Commercial Tax Department. They will first have to register themselves in order to e-file their returns. Post successful registration one can choose the appropriate link and file returns for a specific period. The relevant form related to filing VAT returns should be chosen and details need to be filled out.
Similarly, the same website can be used to make online payments. Registered users can login using their verified credentials and choose to pay either through net banking or credit/debit card. A user will have to fill out the relevant challan and select the mode of payment. Post payment, a Unique Reference Number will be produced which can be used for any further communication.
Frequently Asked Questions:
- Which department is in charge of imposing and collecting VAT in Bihar?
The Department of Commercial Taxes is in charge of VAT imposition and collection.
- How much tax will the dealer have to pay?
The tax to be paid is calculated using a simple formula, with the total tax liability equal to the output tax minus the input tax credit which a dealer is entitled to.
- Will I receive a bank receipt indicating online payment of VAT?
Yes, a cyber receipt containing the unique transaction ID and amount will be displayed after payment. Individuals can take a print out of this receipt for any future communication.
- What is the due date to pay VAT?
VAT should be paid within the 15th of the following month for a particular month. Example, VAT for January should be paid before 15th February of the same year.