In Madhya Pradesh (MP), India, the Value Added Tax (VAT) rates vary depending on the type of goods and services. Below is an overview of the VAT rates in Madhya Pradesh:
| Commodity / Service | VAT Rate | Description |
|---|---|---|
| Petrol and Diesel | 28% | High VAT rate on fuel, which is a significant source of revenue for the state government. |
| Liquor | 20% | Alcoholic beverages are taxed at a high rate, reflecting government efforts to generate revenue from this sector. |
| Tobacco Products | 15% | Includes cigarettes, bidi, and other tobacco products, aimed at discouraging consumption. |
| General Goods | 13% | Applies to most goods not specified under other categories, including electronics, machinery, etc. |
| Jewelry (Gold and Silver) | 1% | A lower VAT rate is applied to gold and silver jewelry to promote trade in precious metals. |
| Essential Commodities | 5% | Applies to essential items like food grains, pulses, and certain dairy products to keep them affordable. |
| Works Contracts | 5% | VAT on works contracts involving the supply of both goods and services, such as construction and repair services. |
Additional Notes:
- High VAT on Fuel and Sin Goods: Madhya Pradesh, like many other Indian states, imposes high VAT rates on petrol, diesel, and liquor to generate significant revenue for the state.
- Lower Rates on Essentials: Essential commodities such as food grains and dairy products are taxed at lower rates to keep them accessible to the general public.
- Jewelry VAT: The 1% VAT on gold and silver jewelry is aimed at promoting the purchase and trade of these precious metals within the state.
- General Goods: A standard rate of 13% is applied to most other goods, balancing the need for revenue with the desire to keep prices reasonable.
This overview provides a snapshot of how VAT is applied in Madhya Pradesh, reflecting the state’s approach to taxation across different categories of goods and services.