Whether VAT Applicable?
This query is : Resolved
12 June 2011
Whether VAT applicable on Gandhi Cap Manufacturing? If yes what is the Turnover Limit for exemption?
13 June 2011
which state are you referring
03 August 2025
Regarding VAT applicability on Gandhi Cap Manufacturing, here’s a clear answer:
1. Is VAT applicable on Gandhi Cap manufacturing?
Yes, VAT is generally applicable on the manufacture and sale of Gandhi Caps, as it is considered a textile product or apparel item in most states.
The sale of such manufactured goods is subject to VAT as per the local state's VAT laws (like Maharashtra VAT, Gujarat VAT, etc.).
2. Turnover Limit for VAT registration and exemption:
VAT registration is mandatory if the turnover exceeds the prescribed threshold limit in the respective state.
Most states have the threshold limit around Rs. 5 lakhs to Rs. 10 lakhs per annum for mandatory VAT registration.
For example:
Maharashtra: Rs. 5 lakhs
Gujarat: Rs. 10 lakhs
Karnataka: Rs. 5 lakhs
Below this turnover limit, the manufacturer can be exempted from VAT registration and VAT payment, but cannot claim input credit.
3. Additional Notes:
Some states may have specific exemptions or reduced rates for handicrafts or traditional items, so it's worth checking local VAT schedules.
Gandhi Cap may also be classified under handicrafts or traditional apparel in some states, potentially impacting tax rate or exemptions.
Summary:
Aspect Details
VAT Applicability Yes, applicable on Gandhi Cap manufacturing
Turnover limit for VAT Usually Rs. 5 to 10 lakhs depending on state
Registration requirement Mandatory if turnover exceeds threshold
1. Is VAT applicable on Gandhi Cap manufacturing?
Yes, VAT is generally applicable on the manufacture and sale of Gandhi Caps, as it is considered a textile product or apparel item in most states.
The sale of such manufactured goods is subject to VAT as per the local state's VAT laws (like Maharashtra VAT, Gujarat VAT, etc.).
2. Turnover Limit for VAT registration and exemption:
VAT registration is mandatory if the turnover exceeds the prescribed threshold limit in the respective state.
Most states have the threshold limit around Rs. 5 lakhs to Rs. 10 lakhs per annum for mandatory VAT registration.
For example:
Maharashtra: Rs. 5 lakhs
Gujarat: Rs. 10 lakhs
Karnataka: Rs. 5 lakhs
Below this turnover limit, the manufacturer can be exempted from VAT registration and VAT payment, but cannot claim input credit.
3. Additional Notes:
Some states may have specific exemptions or reduced rates for handicrafts or traditional items, so it's worth checking local VAT schedules.
Gandhi Cap may also be classified under handicrafts or traditional apparel in some states, potentially impacting tax rate or exemptions.
Summary:
Aspect Details
VAT Applicability Yes, applicable on Gandhi Cap manufacturing
Turnover limit for VAT Usually Rs. 5 to 10 lakhs depending on state
Registration requirement Mandatory if turnover exceeds threshold
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