VAT in Sikkim: Rates, Eligibility & Registration Process
Finance, Revenue and Expenditure Department of Sikkim is the regulatory authority for VAT in Sikkim, which falls under the subdivision, namely, Commercial Taxes Division of the same. This division is solely responsible for levying and collecting VAT. This department also maintains its online portal for smooth processing of e-filing procedures and registration rituals.
What Is Value Added Tax?
VAT or Value Added Tax was introduced in 2005 in India and is only payable by manufacturers of goods and services. It falls under the category of indirect tax and has to be paid to the State Government by the producers at every stage of manufacturing of a product.
However, this tax has been omitted from the taxation system of many states since the introduction of the uniform taxation system or GST.
What Are the VAT Rates for Goods and Services in Sikkim?
Government of Sikkim levies tax on the goods manufactured within the state boundary as well as on the imports. There are five different divisions of VAT applicable on goods and services, which will be more comprehensible through the table given below for Sikkim VAT rate schedule:
| Schedules | Applicable Goods and Services | VAT Rates in Sikkim |
| Schedule I | 85 categories of goods such as books and journals, poultry, cattle and aquatic feed, aids for handicapped individuals, silk yarns, food grains, fresh fruits and vegetables and many more | VAT exempted |
| Schedule II | Silver and gold ornaments, platinum jewellery, bullions and precious stones | 1% |
| Schedule III | 82 categories of items such as non-animal driven and non-manual agricultural implements, bicycles and tricycles, bulk drugs, bamboo, bricks, ferrous & non-ferrous alloys, fertilisers and many more | 4% |
| Schedule IV | 195 products coming under the categories of information technology and industrial inputs | 4% |
| Schedule V | 178 categories of items such as air conditioners, air purifiers, bleaching powder, cement, motors spare parts and many more | 12.5% |
Who Should Pay VAT in Sikkim?
As per Sikkim VAT rules, Value Added Tax is paid by producers of the mentioned goods and services at every stage of manufacturing. Unlike the uniform tax system, VAT is not levied on the final product.
How to Register for VAT in Sikkim Online?
You need to follow the given steps for VAT registration in Sikkim:
Step 1: Visit the official portal of the Commercial Taxes Division of Sikkim.
Step 2: Provide details such as name, address, PAN card details and contact details.
Step 3: Provide your username and password, as well as upload your photo.
Step 4: Submit your application, and your profile will be created upon successful submission.
Alternatively, if you want to register offline, you can visit the commercial taxes division office with all required documents and carry out the application process manually.
How to File a Return Against the VAT Payment in Sikkim?
To carry out the process of VAT returns and payment online, you can follow the procedure discussed below:
Step 1: Visit the web portal of the Commercial Taxes Division.
Step 2: Log in to your account if you are already registered. Otherwise, register yourself first, as it is mandatory for online formalities.
Step 3: Choose the items or services for which you have to pay taxes to the state government.
Step 4: Choose your preferred payment method, online or offline. Online payment is the smoothest and hassle-free way of payment. However, you can also choose to pay offline by visiting the tax collection office at your convenience.
How Is VAT Different from GST in Sikkim?
VAT is an indirect tax imposed by State Governments on goods and services at every stage of production. Consumers pay the accumulated tax of those goods and services on the end product.
GST is also an indirect tax imposed by the Central Government as well as the State Government but on the final product. GST rates are moreover similar for all the states, unlike VAT which varies from one state to another.
Given above are the relevant information regarding VAT in Sikkim. Paying taxes on time following the regulations will save you from a penalty and keep you in the good book of the Government as a responsible citizen of India.
Frequently Asked Questions
Do the residents of Sikkim have to pay no taxes?
Sikkim used to follow its own Sikkim Income Tax Manual 1948, under which no residents had to pay taxes to the Centre. But in 2008, when the tax laws in Sikkim were revoked, Centre exempted the residents from paying taxes by the application of Section 10 (26AAA).
Is TDS applicable for the residents of Sikkim?
TDS filing in Sikkim is done by the employers who hold a Tax Collection and Deduction Number (TAN). Hence, any individual paying taxes under any head of income tax is required to deduct TDS.