Value Added Tax or VAT is a type of consumption tax that is placed on a product. It is a multi-stage tax on goods that is levied across various stages of production. The Value Added Tax Act was introduced in Meghalaya in the year 2003 and is commonly referred to as the Meghalaya Value Added Sales Tax Act, 2003. The act extends to the entire state of Meghalaya and was launched primarily to integrate and synthesize laws pertaining to the implementation of value added tax on the purchase and sale of goods and commodities in the state of Meghalaya.
Meghalaya VAT Rates:
The VAT levied on goods in Meghalaya varies from product to product. VAT is levied according to various schedules with regards to the provisions found under Schedule 1, Schedule 2, Schedule 2(A), Schedule 2(B), Schedule 3, Schedule 4, Schedule 4(A) and Schedule 5.
Under this schedule more than 65 goods and products attract 0% VAT rate or are exempted from VAT. These products include agricultural implements, electrical energy, coarse grains, books, textile fabric, petrol, sugar etc
Under this schedule a VAT rate of 5% applies to more than 150 goods and products, which include communication equipment, medicines and drugs, printed materials, ores and minerals, earth moving machinery etc
Under this schedule a VAT rate of 5% applies to more than 30 types of I.T products such as electronic calculators, I.T software and media, optical fibre cables, radio communication receivers etc
Under this schedule a VAT rate of 5% applies to more than 167 kinds of industrial inputs and packing materials such as animal fats, glycerol, vegetable wax, copper ores, manganese ores etc
Under this schedule a VAT rate of 1% applies to articles of gold and silver, bullion, precious stones and platinum.
Under this schedule a VAT rate of 14.5% applies to work contracts, lease transactions and all other goods not covered by Schedules 1, 2, 3 and 5
Under this schedule VAT rates range from 10% to 30% on work contracts that involve plant and machinery installation, railway coach construction, computer software programming, shipbuilding etc
Under this schedule liquor products, lottery tickets, tobacco, molasses and rectified spirit attract a VAT of 20% while cigarettes attract a VAT of 27%.
Meghalaya VAT Registration:
To register for VAT in Meghalaya, every dealer can register with the Excise Registration Taxation Stamps Department or opt for E-Registration. The E-Registration service enables citizens to fill the online form and apply for the Registration Certificate issued by the Taxation Department, Government of Meghalaya. Any potential dealer can apply for a Tax Identification Number (TIN) in order to be able to transact a commercial business in the state.
Once the dealer enters the required date and submits the form successfully, he or she will receive a system generated application number, with which the applicant will be able to track the status of the application. The applicant will then be intimated via email or SMS regarding when the submission of verification documents, payment of registration fees and collection of the registration certificate can be carried out.
Meghalaya VAT Forms:
The Meghalaya Value Added Tax Act of 2003 details close to seventy different forms that are required to register for VAT in Meghalaya. Each form adheres to a certain requirement. Some of the important ones are:
- Form 1 - Application for registration
- Form 2 - Certificate of registration under Section 31
- Form 32 - Tax invoice
- Form 17 - Declaration for importing taxable goods into Meghalaya
- Form 18 - Declaration for dispatching taxable goods outside Meghalaya
- Form 39 - Tax clearance certificate
These forms can be downloaded from Government of Meghalaya website.
Meghalaya VAT Return e-Filing and Payment:
E-filing of VAT returns and payments can be done online at the official website of the Taxation Department of the Government of Meghalaya. Individuals or dealers can get themselves registered on this website, fill in the online forms and submit the necessary scanned copies of EPIC, PAN, Hedman Address Proof Certificate, Labour Certificate, Trading License from District Council, Municipal License etc
Under Section 35, the submission of periodical returns and payment of tax require the following forms to be filled out:
- Form 5 - Tax returns to be submitted 21 days before the close of the tax period
- Form 6 - Annual returns to be submitted 30 days before the completion of the year
- Form 54 - If the dealer is a registered dealer
Frequently Asked Questions:
- Is there a penalty for failure to register for VAT in Meghalaya?
Yes. For each month of default, a penalty of not less that Rs 5,000 and not exceeding Rs 10,000 will be levied on a dealer who has not registered himself within two months from the date from which he is first liable to pay tax.
- Will a security have to be provided at the time of VAT registration?
The dealer may have to furnish a security as per the Commissioner's scrutiny in order to ensure that no evasion of tax takes place.
- What is the time period within which a dealer is required to get himself registered?
A dealer shall be allowed thirty days time from the date from which he is first liable to pay VAT, to get himself registered.
- What happens if a dealer fails to pay VAT in Meghalaya?
Any dealer to whom a certificate of registration has been granted and who has failed to pay tax, will have his or her certificate of registration suspended by the appropriate assessing authority.