Tax rate

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Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2011 Hello members,

(a) What is the vat rate in respect of liquor manufacturing machinery.

Thanks inadvance

Rahul Vora

Rahul Vora (Expert)

03 January 2011 For which state are you asking for ? In Daman & Diu, the VAT rate is 20%.

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2011 Hi,

It is for karnataka

Thanks in advance

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

26 July 2025 In Karnataka (under the Karnataka VAT Act, 2003), **liquor itself is excluded from VAT**, but when it comes to **machinery or equipment used in liquor manufacturing**, those are considered standard goods—**not liquor products**. Here's what you need to know:

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### ✅ 1. Status of Liquor under Karnataka VAT

As per the KVAT Act, **liquor is exempt from VAT** and falls under **“exempted goods”** (following the repeal of earlier VAT on liquor) ([Indian Kanoon][1]).

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### ✅ 2. VAT on Liquor Manufacturing Machinery

Since **machinery or equipment** is not liquor itself, it is taxed as per the **general VAT schedule**:

* **General category goods** (machinery) are taxed at **14.5%** VAT in Karnataka ([Digit Insurance][2]).
* Only specific goods (like molasses or narcotics) are taxed at **20%**, and luxury goods have special rates—but **industrial machinery does not fall under those categories** ([Digit Insurance][2]).

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### 📋 Summary Table

| Item | VAT Applicability in Karnataka |
| ------------------------------ | -------------------------------- |
| Liquor (beer, wine, spirits) | VAT Exempt |
| Distillery or liquor machinery | Taxable at 14.5% (general goods) |

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So to answer your question:
**VAT rate on machinery used in liquor manufacturing in Karnataka is 14.5%**.

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