Tax payable vat

Under the legacy VAT system, you paid tax based on the nature of the transaction: Interstate purchases (from Punjab) were governed by the Central Sales Tax Act, while Intrastate purchases (from Himachal Pradesh) were governed by local state VAT laws. Whether you could claim credit for these taxes depended on the specific VAT rules and registration status of your business in that state at the time. Since VAT was replaced by GST in 2017, current tax liabilities are now governed by the GST Act, which classifies transactions as Interstate (attracting IGST) or Intrastate (attracting CGST + SGST).