Whether VAT Applicable?
This query is : Resolved
Datta D. Saware
(Querist)
12 June 2011
Whether VAT applicable on Gandhi Cap Manufacturing? If yes what is the Turnover Limit for exemption?
CA Suresh Jain
(Expert)
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
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- EPF ECR NEW FILE SEP 17TH 2026
- Depreciation Chart Companies Act
- Capital Gail Exemption Certificate
- Oct 2025 Invoices
- SECTION 393(3) TAX ON CASH WITHDRAWAL
- Utilisation Fy 25-26 TDS challans in Fy 26-27 TDS Return
- Clarification Requested: Gift → NRO → NRE → Overseas Transfer - USA/CANDA (FEMA & Tax Compliance)
- Capitalgain tax purposes for valuation report compulsory
- Under marginal scheme
- TDS on Fixed Assets purchased
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
