Sale of Gooods and Service
This query is : Resolved
22 April 2009
How VAT is Applicable to both the sale of goods and Services ?At what rate it is charged?
22 April 2009
Please read full details of GST in a article published by Mr Sudhir Halakandi
22 July 2025
Sure! Here's a quick clarification on VAT and services:
---
### VAT on Goods vs. Services
* **VAT (Value Added Tax)** is **applicable only on sale of goods**.
* **Services are not subject to VAT**; they are taxed under **Service Tax** (before GST came into effect in 2017).
---
### Before GST (pre-July 2017):
| Type of Supply | Tax Applicable | Tax Rate |
| -------------- | ---------------------- | ------------------------------------------- |
| Goods | VAT (state-wise rates) | Typically 5-15% (varies by state and goods) |
| Services | Service Tax (central) | Around 14% (varied over time) |
---
### After GST (post-July 2017):
* VAT and Service Tax were replaced by **GST (Goods and Services Tax)**.
* GST is a **unified tax** on **both goods and services**.
* GST rates are mostly **5%, 12%, 18%, or 28%**, depending on the product/service.
---
If you want, I can share detailed GST rate schedules or more about pre-GST VAT/Service Tax rules!
---
### VAT on Goods vs. Services
* **VAT (Value Added Tax)** is **applicable only on sale of goods**.
* **Services are not subject to VAT**; they are taxed under **Service Tax** (before GST came into effect in 2017).
---
### Before GST (pre-July 2017):
| Type of Supply | Tax Applicable | Tax Rate |
| -------------- | ---------------------- | ------------------------------------------- |
| Goods | VAT (state-wise rates) | Typically 5-15% (varies by state and goods) |
| Services | Service Tax (central) | Around 14% (varied over time) |
---
### After GST (post-July 2017):
* VAT and Service Tax were replaced by **GST (Goods and Services Tax)**.
* GST is a **unified tax** on **both goods and services**.
* GST rates are mostly **5%, 12%, 18%, or 28%**, depending on the product/service.
---
If you want, I can share detailed GST rate schedules or more about pre-GST VAT/Service Tax rules!
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