Vat registration
This query is : Resolved
30 August 2014
Hello Sir/Madam
I am starting a new garments exports business. Earlier I was selling fabric locally. My query is do I need to register for VAT if I am exporting garments along with supplying fabric locally, considering I cross the VAT registration threshold ? I will not be selling garments locally, only fabric.
Regards
Pankaj
I am starting a new garments exports business. Earlier I was selling fabric locally. My query is do I need to register for VAT if I am exporting garments along with supplying fabric locally, considering I cross the VAT registration threshold ? I will not be selling garments locally, only fabric.
Regards
Pankaj
30 August 2014
Hello Sir/Madam I am starting a new garments exports business. Earlier I was selling fabric locally. My query is do I need to register for VAT if I am exporting garments along with supplying fabric locally, considering I cross the VAT registration threshold ? I will not be selling garments locally, only fabric. Regards Pankaj
03 August 2025
Hi Pankaj,
Here’s a clear answer for your VAT registration query:
---
### Do you need VAT registration if you export garments but sell fabric locally?
* **Exports are zero-rated or exempt from VAT** in most states, meaning no VAT is charged on exports.
* However, **local sales of fabric are taxable** under VAT.
* **If your total turnover (local sales + exports) exceeds the state’s VAT registration threshold (usually ₹5 or ₹10 lakhs), you must register for VAT.**
* Even if you are **not selling garments locally but only exporting them**, the **export turnover counts towards your total turnover** for registration purposes.
* Once registered, you can **claim input tax credit** on inputs used for both fabric sales and garment exports.
---
### Summary:
| Scenario | VAT Registration Required? |
| --------------------------------- | ---------------------------------------- |
| Local sales of fabric only | Yes, if turnover exceeds threshold |
| Export of garments only | Exempt, but turnover counts |
| Both local fabric sales + exports | Yes, if total turnover exceeds threshold |
---
**So, since you are selling fabric locally and exporting garments, and your turnover crosses the threshold, you must register for VAT.**
Let me know if you want help with the registration process or related compliance!
Here’s a clear answer for your VAT registration query:
---
### Do you need VAT registration if you export garments but sell fabric locally?
* **Exports are zero-rated or exempt from VAT** in most states, meaning no VAT is charged on exports.
* However, **local sales of fabric are taxable** under VAT.
* **If your total turnover (local sales + exports) exceeds the state’s VAT registration threshold (usually ₹5 or ₹10 lakhs), you must register for VAT.**
* Even if you are **not selling garments locally but only exporting them**, the **export turnover counts towards your total turnover** for registration purposes.
* Once registered, you can **claim input tax credit** on inputs used for both fabric sales and garment exports.
---
### Summary:
| Scenario | VAT Registration Required? |
| --------------------------------- | ---------------------------------------- |
| Local sales of fabric only | Yes, if turnover exceeds threshold |
| Export of garments only | Exempt, but turnover counts |
| Both local fabric sales + exports | Yes, if total turnover exceeds threshold |
---
**So, since you are selling fabric locally and exporting garments, and your turnover crosses the threshold, you must register for VAT.**
Let me know if you want help with the registration process or related compliance!
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