Chandigarh VAT/Commercial Tax

All goods that are purchased from Chandigarh carry a Chandigarh VAT or Commercial Tax. However, goods that are exported to a different country in addition to items sold from DTAs to SEZs and EOUs, and between SEZs and EOUs are exempt from this tax.

Chandigarh Value Added Tax or Commercial Tax was introduced in 2005 to ensure the levy of VAT or Value Added Tax on expenditures on purchase of goods in Chandigarh. Dealers collect the Value Added Tax on their sales while consumers are the ones who pay it. The Value Added Tax rate is based on the goods being sold.

VAT/Commercial Tax Rate in Chandigarh:

The VAT charged in Chandigarh is applicable according to different schedules. Given below is a list of schedules applicable.

Schedule 1:

Under the Schedule 1 of VAT, 56 goods and products are charged no VAT rate or they are completely exempted from the charges of VAT. The products include manually operated agricultural implements, paper and newsprint, life saving drugs, renewable energy materials, kerosene, fresh vegetables and fruits, textiles and much more.

Schedule 2(A):

Many products are exempted from VAT under this schedule. Given below is a list of products that are exempted under Schedule 2(A)

  • Goods exported to another country
  • Goods sold from Domestic Tariff Area (DTA) to Special Economic Zones (SEZ) and Export Oriented Units(EOU)
  • Goods exported by Export Oriented Units (EOU)
  • Goods sold between SEZ & EOU.

Schedule 2(B):

VAT rate of 1% is charged on products of gold and silver, bullion, precious stones and platinum under Schedule 2(B)

Schedule 2(C):

A VAT rate of 5% is applicable to more than 115 products including products such as intangible goods like copyrights, patents etc, communications equipment, non-manually operated agricultural implements, bulk drugs, sports goods, kitchen ware, hospital equipment etc under Schedule 2(C)

Schedule 2(D):

A VAT rate of 13.5% is charged for over 159 goods under this act. Given below are some of the important goods that fall under Schedule 2(D)

  • Advertising hoardings
  • Aeroplanes and other aircrafts
  • Arms and ammunition
  • Cosmetics
  • Electronic gadgets
  • Tobacco products etc

Schedule 3:

Under this schedule all kinds of Works Contracts will attract a VAT rate of 13.5%

Schedule 3(A):

Under this schedule certain types of Works Contracts such as plant and machinery installation, building construction, programming of computer software, construction of motor vehicles etc shall attract a VAT rate of 30%

Registration of Chandigarh Commercial Tax/VAT:

One can register for Chandigarh VAT(Value Added Tax) at Chandigarh Taxation department or online. One can register for VAT online through the e-registration portal. The individual has to obtain the registration form for the VAT online and fill in a few details first. They will be asked to attach a few important copies of documents along with the completed application form. It is very important to fill in the correct details in the form.Once it is submitted, the individual will get a reference number. The individual can also keep a track on progress of their application online.

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