Tax rate

This query is : Resolved

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)
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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

Aashok Kumar Sharma (Expert)
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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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