Odisha VAT - Understanding Rates, Forms, and Applicability

The Odisha Value Added Tax Act of 2004 has around 93 different forms that are required to register for VAT in Odisha. Each form adheres to a certain requirement, as laid down by the state’s Tax Department.

A few of the important forms are listed as under:

1. Form VAT 101 - Application for registration
2. Form VAT 001 - Certificate of registration under Section 31
3. Form VAT 101 C - Declaration for importing taxable goods
4. Form VAT 317 - Tax invoice
5. Form VAT 201 - VAT returns

Odisha VAT Rates

The VAT charged on goods in Odisha differs according to the product. The rates are divided into categories based on the four schedules of the Odisha VAT Act 2004. The provisions are categorized under Schedule A, Schedule B, Schedule C, and Schedule D.

Schedule A:

Under this schedule more than 47 goods and products are exempted from VAT that is they attract 0% VAT rate. These products include agricultural implements, electrical energy, coarse grains, books, textile fabric, petrol, sugar etc

Schedule B:

Under this schedule a VAT rate of 1% applies to gold and silver, bullion, precious stones and platinum, among many others.

Schedule B(1):

Under this schedule a VAT rate of 5% applies to more than 131 goods and products, which include communication equipment, intangible goods like patents, copyrights, and REP licence, medicines and drugs, printed materials, ores and minerals, earth moving machinery etc, garments, etc.

Schedule B(2):

Under Schedule B(2) different commodities are charged different rates.

1. Unmanufactured tobacco, beedis, and tobacco used for manufacturing beedis is charged 10% VAT.
2. Tobacco and its products, other than unmanufactured tobacco and beedis, have a VAT rate of 25%.
3. A rate of 50% is applicable on all pharmaceutical oral liquid preparations, other than Homeopathic and Ayurvedic drugs, containing absolute alcohol 20% v/v or more in the finished product.
4. Pre-owned commercial vehicle sold through registered dealers have 2% VAT rate levied on them.

Schedule B(3):

Under this schedule a VAT rate of 13.5% applies all other goods not covered by Schedules B, B(1), B(2), and C.

Schedule C:

Under this schedule a VAT rate of 20% applies foreign and country liquor, light diesel oil, motor spirit including petrol and high speed diesel, and narcotics.

Schedule D:

The following goods fall under this schedule a VAT rate. The rate may vary according to the commodity:

1. Capital goods purchased or paid prior to 01.04.2005
2. Capital expenditure incurred prior to the date of registration under VAT.
3. Capital goods not connected with the business of the dealer.
4. Capital goods used in manufacture of goods or providing services or trading activities which are not liable to tax under VAT.
5. Capital goods used in energy/power including captive power.
6. Capital or other expenditure on land, civil structure or construction.
7. Second hand purchase or subsequent purchases of capital goods.
8. Vehicles for conveyance and transportation.

Odisha VAT Registration

In Odisha, VAT Registration is mandatory for dealers who have an annual turnover above Rs.5 lakhs during the current year or during the preceding twelve months. Dealers who are involved in the sale and purchase of goods from other states should also register for VAT. Additionally, VAT registration is also mandatory for those involved in manufacturing of goods with a turnover of Rs.1 lakh or more per year.

In case a dealer doesn’t qualify under for mandatory Odisha VAT Registration he may still obtain Odisha VAT Registration voluntarily under Section 26 of the Odisha VAT Act 2004. Dealers who wish to establish a business in the state can also obtain VAT registration voluntarily under Section 26.

To obtain Odisha VAT Registration, the dealer must submit the following:

1. Application for VAT Registration in Form VAT 101
2. Proof of identity
3. Proof of address
4. List of items to be manufactured or traded
5. PAN copy
6. Bank statement
7. Photo of the promoters and other details to the concerned authorities.

Odisha VAT Return e-Filing and Payment

All dealers in Odisha are required to file an annual VAT Return within six months from the end of the financial year. Dealers whose annual turnover is over Rs.40 lakhs must submit an annual VAT audit certificate along with the annual VAT Return.

In addition to the annual VAT Return, dealers are also required to file monthly or quarterly VAT Return depending on their respective tax period within a period of 21 days at end of tax month or tax quarter, whichever is applicable. VAT Returns can be e filed through the government website.