Indian indirect taxation | Updated October 2026

VAT Registration in India: Current Rules, Delhi VAT and GST

Value Added Tax (VAT) remains relevant for certain goods outside the Goods and Services Tax (GST) framework. This guide explains when state VAT registration may still be required, with particular reference to Delhi, and how it differs from GST registration.

Important legal update: GST replaced state VAT on most goods and services from 1 July 2017. The old Delhi VAT registration turnover figures and general dealer rules should not be applied to ordinary GST-taxable supplies today. State VAT continues for specified products, subject to the applicable state law and current notifications.

What is Value Added Tax (VAT)?

VAT is an indirect tax on sales of goods under state legislation, generally structured to tax value added through successive transactions with eligible input-tax adjustments. Before GST, VAT was a principal state-level tax on domestic sales. Since the introduction of GST, VAT has a narrower scope and does not operate as a general alternative to GST.

Which goods remain under VAT in India?

Under the constitutional and statutory framework, GST does not presently apply to alcoholic liquor for human consumption. Five petroleum products - petroleum crude, high-speed diesel, motor spirit (petrol), natural gas and aviation turbine fuel - are to be brought under GST from a date notified on the recommendation of the GST Council. Until then, their relevant sales remain subject to the applicable VAT or sales-tax framework, where imposed by the state.

VAT registration, rates, exemptions and return requirements therefore depend on the particular goods, state or union territory, transaction and current notifications. A business dealing exclusively in normal GST-covered products should generally consider GST registration, not a fresh VAT registration.

Who is a dealer and what is a sale under Delhi VAT?

The Delhi Value Added Tax Act, 2004 (DVAT Act) contains statutory definitions relevant to transactions that remain within its scope. Section 2(1)(j) defines a dealer broadly by reference to a person who buys or sells goods in connection with business, including specified agents and other entities. Whether a particular person is liable depends on the charging, registration and exemption provisions as currently applicable.

Section 2(1)(zc) - Sale: the definition includes transfers of property in goods for consideration and certain deemed sales, such as hire-purchase, transfers of the right to use goods, specified works-contract transfers and supplies of food or drink in relevant circumstances. The legal treatment of these transactions must be read together with the post-GST legislative changes: many transactions previously treated as VAT sales now fall under GST.

Historically, the DVAT definition of dealer covered commission agents, brokers, auctioneers, non-resident dealers or their agents, clubs, associations, cooperative societies, casual traders, and entities selling scrap or obsolete goods. These categories do not automatically mean that every such person needs VAT registration today.

VAT registration: when is it compulsory?

Registration is determined by the applicable state VAT law and its current amendments, rules and notifications. For Delhi, Section 18 of the DVAT Act deals with registration liability, while Section 16A contains provisions concerning casual traders. Historic turnover thresholds appearing in older guides, including Rs. 20 lakh under an earlier Delhi VAT regime, are not a reliable current registration test for all businesses.

Identify the goods: confirm that the products sold remain within state VAT rather than GST.
Identify the place of sale: registration is state-specific and the applicable authority depends on the jurisdiction.
Check the current threshold or special rule: special registration conditions may apply to importers, casual traders or other dealer categories under the relevant legislation.
Apply through the state tax authority: use the prescribed registration process and maintain records and invoices required for VAT-covered transactions.

For ordinary taxable goods or services under GST, registration is governed principally by Section 22 (persons liable for registration), Section 24 (compulsory registration in specified cases), and Section 25 (registration procedure) of the Central Goods and Services Tax Act, 2017. Thresholds and exceptions vary by supply type, state and notifications.

Documents commonly required for VAT registration

The exact checklist varies by state and the nature of the dealer. The tax authority may request:

PAN and identity documents of the proprietor, partners or authorised signatories.
Constitution documents, such as partnership deed, incorporation certificate or constitutional records.
Proof of principal place of business, such as ownership documents, lease agreement or utility bill.
Bank account details and authorised signatory information, where prescribed.
Business activity details, product descriptions, and supporting licences or registrations.
Additional declarations, security or supporting evidence when required by the state rules.

Always use the current official application form and document list; do not rely on pre-GST VAT checklists for new GST registrations.

VAT payment, invoices and return due dates

VAT-covered dealers may need to issue prescribed invoices, maintain purchase and sales registers, calculate tax payable after any allowable adjustments, file periodic returns and pay tax by the deadlines prescribed under the relevant state law. The filing frequency and due dates are not uniform across India and can change through official notifications or extensions.

For Delhi VAT matters, consult the Delhi VAT portal and the Department of Trade and Taxes, Government of NCT of Delhi for the latest registration, return and payment facilities. Dealers should also check applicable assessment, amendment, cancellation and record-retention obligations.

VAT versus GST: key differences

Aspect	State VAT	GST
Coverage	Specified goods remaining outside GST, depending on law	Most taxable supplies of goods and services
Legislation	Applicable state VAT or sales-tax statute	CGST, SGST/UTGST and IGST laws
Registration	Relevant state tax authority	GST common portal
Input tax treatment	As permitted under applicable VAT law	Input tax credit subject to GST conditions
Returns	State-specific forms and deadlines	GST returns and prescribed timelines

Official laws and government resources

India Code - central legislation, including the Constitution and CGST Act.
Central Board of Indirect Taxes and Customs (CBIC) - GST law, notifications and guidance.
GST Portal - registration, returns and taxpayer services.
Delhi VAT Portal - VAT-specific services and information.
Delhi Department of Trade and Taxes - official state tax administration.
GST Council - recommendations and GST-related updates.

Need help with VAT or GST registration?

For registration assistance, return filing and tax compliance services, email contact@businesswonder.com. Include the state, nature of goods and business activity so the correct VAT or GST requirements can be identified.

This article provides general information, not an individual legal opinion. Check the latest legislation, notifications and departmental instructions before acting.