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  • Nagaland VAT

    Overview of VAT in Nagaland:

    Value Added Tax, or VAT as is it commonly referred to as, is an indirect tax which has replaced the General Sales Tax. VAT has been in existence in the country for around a decade now and every state in the country has VAT levied on sales and purchases of different goods. The Nagaland Value Added Tax Act came into existence on April 1, 2005.

    Nagaland VAT Rates:

    The VAT applicable on goods in Nagaland varies according to the product, with Schedule I, Schedule II, Schedule III, Schedule IV, Schedule V, Schedule VI, and Schedule VII of the Act containing provisions for different rates.

    Schedule I:

    Goods under Schedule I are exempted and include agricultural products, charcoal, coconut fibre, milk products, vegetables, artificial limbs, books, handloom fabrics, etc. A total of 74 goods fall under this schedule in Nagaland VAT Act 2005.

    Schedule II:

    Goods and products under Schedule 2 attract zero percent VAT under Section 12(4)(a) of the Act. They include Non-judicial stamp sold by Government Treasuries, postal items like envelope, postcard etc. sold by the Government, rupee note & cheques, khadi garments, indigenous handmade musical instruments, vaccines of all kinds, etc.

    Schedule III:

    Bullions, precious metals like gold, silver, gemstones, and Canteen Sales Department (CSD) goods attract 1% VAT, under Schedule III.

    Schedule IV:

    Goods and products under Schedule IV of the Act attract VAT of 5%. A total of 353 products are mentioned under this Schedule. These include machine operated agricultural implements, intangible goods, bamboo, spare parts of motor vehicles, kitchen utensils made of brass/precious metals, bio fertilisers, candles, coffee beans, coal tar, tea, dry fruits, etc.

    Schedule V:

    A total of 175 goods mentioned under Schedule V of the Nagaland VAT Act 2005 attract a rate of 14.5%. The items under this list are hospital instruments, electrical domestic commercial appliances, dry fruits,milk products instant and preserved foods, machinery that runs on electricity, hydro-dynamic and steam power, motor vehicles, etc.

    Schedule VI:

    Alcohol, including foreign and Indian made foreign liquor, and lottery tickets attract a VAT rate of 20% under Section 12(4)(e) of the Nagaland VAT Act 2005.

    Schedule VII:

    Under Schedule VII, a rate of 5% is levied on work contracts without any deductions. With deduction on account of labor and service charges subject to a maximum of 65% of the total value of works contract under Section 12(5) of the Nagaland VAT Act 2005, attracts a VAT rate of 14.50%.

    Nagaland VAT Registration:

    Dealers who trade of goods and products that attract VAT have to mandatorily register themselves before they can carry out any trade-related activities. It is essential to obtain a valid certificate of registration from the concerned authority.

    Dealers applying for VAT registration should fill up the VAT registration form, and provide details such as their name, nature of business, PAN, bank account and contact details, legality of business, number of branches, immovable properties owned by the business, and details of goods sold by an individual, among others. Once the details are verified by competent authorities, a certificate will be issued to the dealer.

    Nagaland VAT Forms:

    There are around 37 forms of the Nagaland VAT Act of 2005 under different headings, each fulfilling a particular requirement. The Act provides provisions for various forms, with special forms for every purpose in order to simplify VAT registration, collection and distribution. The most important forms include registering your business, applying for a refund, security Bond, Tax Deducted at Source and or tax returns form. In case of immediate registration, a dealer can opt for the same on the official website of the Nagaland Commercial Tax Department.

    Nagaland VAT Returns e-Filing and Payment:

    Dealers in Nagaland who wish to e-file their VAT returns can do so, through the official website of the Nagaland Commercial Tax Department. Online registration, to generate credentials for future reference, is required to e-file returns. Post the registration one can choose the appropriate link and file returns for a specific period. Correct details should be entered in the relevant form related to filing VAT returns.

    Similarly, the same website can be used to make online payments. Registered dealers can login using their verified credentials and choose to pay either through net banking or credit/debit card. A relevant challan will be generated where the dealer will have to enter appropriate details and select the mode of payment. Post payment, a Unique Reference Number is generated, which can be used for further communication.

    Nagaland VAT FAQs:

    1. Who can register for VAT?

      Dealers whose turnover exceeds the turnover limit, as set by the Government of Nagaland, and who are registered under Sales Tax Act 1956 are liable to register for VAT. The turnover limits are as under:

      • In case of casual or non-resident dealer - Rs 10,000
      • In case of manufacturer/importer - Rs 100,000
      • Other dealers, excluding the above mentioned - Rs 500,000
    2. Can VAT payments be made online?

      Yes. A dealer can pay taxes online via the official website of Nagaland Commercial Tax Department. By logging with the registered credentials, VAT returns can also be filed through the official portal.

    3. Can a dealer apply for a duplicate Registration Certificate?

      Yes. The assessing authority of Nagaland provides a duplicate certificate of registration only in case of loss, defacement or destruction of the original certificate, by paying a nominal fee of Rs 10. However, appropriate proof of loss should be provided to the authority.

    4. What are the VAT rates in Nagaland?

      The VAT rates in Nagaland, as determined by the state’s Tax Department may vary according to the commodity. VAT rates may range from 1% to 25%. There are also a few goods that have been exempted from VAT.

    5. Are there any exemptions in Nagaland VAT?

      Yes, as per the rules and regulations of the Nagaland Tax Department, a few goods and commodities that are exported from India, goods and services provided by EPIPs are exempted from VAT. Sales to Special Economic Zones and from SEZ units are also not liable for VAT.

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