GST vs VAT in India: 2026 Guide India for SMBs

Q: What is a VAT GST number?

VAT GST number is everyday language for the 15-digit GSTIN that replaced the older state-issued VAT TIN. After 1 July 2017, all VAT-registered dealers were migrated to GST. The old TIN was deprecated. New businesses today register only for a GSTIN - there is no separate VAT registration except for petroleum and alcohol traders.

GST replaced VAT, Service Tax, Excise Duty, and 14 other indirect taxes when it rolled out on 1 July 2017. VAT (Value Added Tax) was a state-level tax on the sale of goods; GST is a unified national tax on the supply of both goods and services. A small slice of VAT survives — it's still charged by states on petroleum products, alcohol for human consumption, and a few other excluded items.

If you're searching for a "VAT GST registration number," you're looking for a GSTIN. The VAT regime ended for most businesses on 30 June 2017. This guide walks through what changed, what didn't, and which businesses still deal with VAT today.

What is the difference between GST and VAT?

VAT was a state-level indirect tax on the value addition at each stage of sale of goods within a state. Each state had its own VAT Act, its own rates, its own forms, and its own deadlines. Inter-state sales attracted Central Sales Tax (CST). Services were taxed separately under Service Tax administered by the centre.

GST is a single, unified, destination-based indirect tax on the supply of both goods and services. It's split into CGST (collected by centre), SGST (collected by state), and IGST (collected by centre on inter-state supply, then shared). One law, one rate structure, one set of returns across India.

Aspect	VAT (pre-July 2017)	GST (current)
Coverage	Sale of goods only (within a state)	Supply of goods + services + immovable property leases
Authority	State governments (each state had its own VAT Act)	Centre + state jointly under GST Council
Cross-state sales	Central Sales Tax (CST), 2% with C-form	IGST, integrated and seamless
Service tax	Separate central tax (15%)	Subsumed into GST
Number of returns	Multiple per state per tax type	Unified GSTR-1, GSTR-3B, GSTR-9
Input credit	State-level only, broken across CST/Service Tax/Excise	Cross-utilisable across CGST, SGST, IGST
Registration ID	11-digit TIN (different per state)	15-digit GSTIN (PAN-based, state code embedded)
Threshold	Varied by state (₹5L to ₹10L)	₹40L goods / ₹20L services (₹10L special states)
Compliance burden	High (multiple acts, multiple portals)	Lower in principle, complex in practice

Which taxes did GST replace?

GST subsumed 17 different indirect taxes when it launched. The full list:

Central taxes subsumed

Central Excise Duty
Service Tax
Additional Duties of Excise (Goods of Special Importance)
Additional Duties of Excise (Textile and Textile Products)
Additional Customs Duty (Countervailing Duty / CVD)
Special Additional Duty of Customs (SAD)
Central Surcharges and Cesses (related to supply of goods or services)

State taxes subsumed

State VAT (Value Added Tax)
Central Sales Tax (CST)
Purchase Tax
Luxury Tax
Entry Tax (all forms, including Octroi)
Entertainment Tax (other than levied by local bodies)
Taxes on advertisements
Taxes on lotteries, betting, and gambling
State Surcharges and Cesses (related to supply of goods or services)

Where does VAT still apply in India?

Five categories were intentionally kept outside GST when the Constitution was amended in 2016. State VAT continues to apply on these:

Petroleum crude
High-Speed Diesel (HSD)
Motor Spirit (Petrol)
Natural gas
Aviation Turbine Fuel (ATF)

Each state government continues to charge VAT on these fuels at rates between 6% and 35% — which is why petrol prices vary widely across states. The GST Council has the power to bring petroleum products under GST, but as of 2026, it hasn't.

Additionally, alcohol for human consumption is constitutionally outside GST under Entry 8 of List II of the Seventh Schedule. State governments charge state excise + VAT on alcohol. Tobacco is under GST but also attracts central excise duty. Real estate sale of completed flats (with completion certificate) is outside GST and attracts state stamp duty + registration charges.

What is "VAT GST registration number"?

"VAT GST number" is a casual way of asking about the GSTIN — the 15-digit identifier that replaced the old VAT TIN. When India transitioned in 2017, every existing VAT-registered dealer was migrated automatically to GST and issued a GSTIN. The old TIN was deprecated.

If you're an old VAT dealer who never registered for GST, your VAT TIN no longer works. You must apply for a fresh GSTIN under your current PAN — see our step-by-step GST registration guide.

For petroleum dealers and liquor traders, a separate VAT TIN under the state VAT Act is still issued. This is distinct from the GSTIN and is administered by the state's Commercial Tax Department, not the GST portal. Many petroleum dealers hold both — VAT TIN for fuel sales, GSTIN for ancillary supplies.

How was VAT calculated, and how does GST calculate differently?

VAT was charged on the "value added" at each stage of sale within a state. Inter-state sales were CST. Services were Service Tax. The complexity meant a manufacturer in Maharashtra selling to a retailer in Karnataka had to deal with Excise + CST + the importing state's compliance — three taxes, three forms, three portals.

GST simplifies this. The same Maharashtra-Karnataka transaction is one IGST invoice, one return, one credit ledger:

Transaction	VAT regime	GST regime
Manufacturer sells goods in same state	Excise (12%) + state VAT (12.5%)	CGST (9%) + SGST (9%) = 18%
Manufacturer sells goods inter-state	Excise (12%) + CST (2% with C-form) + import state's entry tax	IGST (18%) — single tax, free credit flow
Service provider invoices client	Service Tax (15%) — no VAT	CGST + SGST (or IGST) at applicable rate
Trader sells to consumer in same state	State VAT (12.5%)	CGST (9%) + SGST (9%) = 18%

Migration from VAT to GST — what happened in 2017?

Between July 2016 and June 2017, the GST Network (GSTN) auto-migrated every VAT, Service Tax, and Excise registrant to GST. Each existing taxpayer received a Provisional ID (PID) and a temporary password. They had to:

Log in to gst.gov.in with the PID
Complete enrolment with PAN, business details, and bank info
Receive a Provisional Registration Certificate (Form GST REG-25)
Within 90 days, complete final registration to convert to a regular GSTIN
Once finalised, the old VAT TIN became inactive

Dealers who didn't complete the migration window had their provisional registrations cancelled (Form REG-28). A few hundred thousand small dealers fell off the system in this transition. Many later came back through fresh registration once they hit the GST threshold.

Did GST rates go up or down compared to VAT?

For most goods, the combined tax burden under GST is similar to or slightly lower than the pre-GST regime (Excise + VAT). For services, GST at 18% is higher than the old Service Tax of 15%.

Goods rate movements (representative sample):

Item	Pre-GST (Excise + VAT)	GST rate
Personal computers	~25-26%	18%
Refrigerators, washing machines	~26-28%	18% (post-2018 rationalisation, earlier 28%)
Cement	~28-30%	28%
Hotel rooms ₹1,000–₹7,500	~9% (luxury tax + service tax)	12%
Restaurants (AC)	20%+ (VAT + service tax)	5% (without ITC)
Mobile phones	~12% (Excise + VAT)	18%

Services moved from Service Tax 15% to GST 18% for most categories — a clear increase. The trade-off: services now have unified ITC across all input goods and services, which was largely unavailable under the Service Tax regime.

Frequently Asked Questions

Is GST the same as VAT?

No. GST is a unified national tax on supply of goods and services that replaced VAT, Service Tax, Excise, and 14 other taxes from 1 July 2017. VAT was a state-level tax on sale of goods within a state. The two systems are structurally different — GST is destination-based with seamless input credit; VAT was origin-based with credit broken across states.

What is a VAT GST number?

"VAT GST number" is everyday language for the 15-digit GSTIN that replaced the older state-issued VAT TIN. After 1 July 2017, all VAT-registered dealers were migrated to GST. The old TIN was deprecated. New businesses today register only for a GSTIN — there's no separate VAT registration except for petroleum and alcohol traders.

Does VAT still exist in India?

Yes, but only for five excluded items: petroleum crude, high-speed diesel, petrol, natural gas, and aviation turbine fuel — plus alcohol for human consumption (separate state excise + VAT). Each state continues to charge its own VAT rate on these items. All other goods and services moved to GST in 2017.

Why is VAT still charged on petrol and diesel?

Petroleum products were intentionally kept outside GST under the 101st Constitutional Amendment because they form a major revenue source for state governments (₹4 lakh crore+ annually combined). Bringing them under GST requires a GST Council decision — repeatedly proposed but not approved as of 2026 due to revenue concerns of producing states.

Do businesses today need both VAT and GST registration?

Only if they deal in petroleum products or alcohol for human consumption. A regular trader, manufacturer, or service provider needs only a GSTIN. Petroleum dealers and liquor traders typically hold both — VAT TIN under their state VAT Act for fuel/liquor sales, GSTIN for ancillary supplies (snacks, lubricants, accessories).

What happened to VAT TIN after GST was introduced?

Existing VAT TINs were migrated to GSTINs automatically through the GST Network. Each VAT dealer received a Provisional ID, completed enrolment, and was issued a 15-digit GSTIN. Old VAT TINs became inactive after the 90-day migration window in 2017. The state Commercial Tax Departments retain the old records for historical assessments and audits.

If you're transitioning a legacy VAT-era business or just need a fresh GSTIN, our GST registration service handles the application end-to-end for ₹499. For more on what GST replaced and how it works today, see our GST registration complete guide or the GST vs income tax breakdown.

What should you verify before using this GST Basics guide?

Before acting on gst vs vat in india, verify the current rules or platform behavior with the GST Portal. The practical answer depends on your business model, state, turnover, documents, software stack, and whether the decision affects tax, customer data, paid media spend, or a production workflow.

Use this article as a working checklist, then confirm thresholds, registration status, return forms, document rules, and portal notices. In our audits, most expensive mistakes do not come from ignoring the whole process. They come from one stale assumption, one mismatched address, one missing event, or one automation path that nobody tested after launch.

Checkpoint	Why it matters	Where to confirm
Current rule or platform status	Limits, forms, policies, and APIs can change after a blog update.	GST Portal
Your exact business case	A local shop, freelancer, D2C store, agency, and SaaS team rarely need the same next step.	Documents, invoices, campaign data, analytics setup, or workflow logs
Implementation evidence	The safest GST decision is backed by proof, not memory or screenshots from an old setup.	Portal acknowledgement, dashboard export, invoice sample, test lead, or error log

How do we apply this in real business work?

We start with the smallest decision that can be verified. For compliance work, that means matching PAN, address, bank, invoices, and portal status before filing. For websites, marketing, analytics, and automation, it means testing the real user path from first click to final record. The boring checks catch the costly failures.

A useful rule: if a claim changes money, tax, reporting, or customer communication, keep evidence for it. Save the acknowledgement, export the report, test the form, and note the date you verified the source. That gives you a clean trail when a client, officer, platform, or internal team asks why the setup was done that way.

When should you get expert review?

Get expert review when the next action can create tax exposure, lost reporting data, ad waste, broken customer communication, or production downtime. A simple self-check is enough for low-risk learning. A filed return, new registration, tracking migration, paid campaign restructure, or live automation deserves a second set of eyes before it affects customers or records.

How often should this be rechecked?

Recheck the decision whenever your turnover, state, product mix, campaign budget, website stack, analytics property, or workflow ownership changes. Also recheck it after major portal updates, platform policy changes, annual filing deadlines, and vendor migrations. The guide is useful today only if the facts behind it still match your business.

What is the fastest safe way to decide?

Write the decision in one sentence, list the proof needed for that sentence, and verify only those items first. This keeps the work focused. If the proof confirms the decision, proceed. If one item is unclear, pause and resolve that point before changing filings, campaigns, tracking, website code, or automation logic.

What can go wrong if you skip verification?

The usual failure is not dramatic at first. It looks like a rejected application, a wrong tax invoice, a missing conversion, a duplicate lead, a broken report, or a workflow that silently stops. Those small failures become expensive when nobody notices them until month-end reporting, filing day, or a customer escalation.

What evidence should you keep after making the change?

Keep enough evidence to reconstruct the decision later. For a compliance topic, that usually means the application reference number, registration certificate, invoice sample, return acknowledgement, payment challan, notice reply, or source link checked on the day of filing. For a website, campaign, analytics setup, or automation, keep the before-and-after screenshot, test submission, dashboard export, webhook log, and the exact setting that changed.

This matters because most business fixes are revisited months later, when nobody remembers the original reason. A short evidence trail makes audits faster, handovers cleaner, and vendor conversations more precise. It also keeps the advice in this guide tied to your real operating context instead of becoming a generic checklist that gets copied without review.

Date checked: record when the official source, dashboard, or portal screen was reviewed.
Business context: note the entity, state, product, campaign, property, or workflow affected.
Proof of action: save the acknowledgement, report export, test result, or live URL.
Owner: assign one person to re-check the item when rules, tools, or business volume change.

Repeat this check whenever rules, platform settings, business volume, or ownership changes.

Which next step should you take after reading this?

Turn the article into one action list. Mark what is already true, what needs proof, and what needs expert review. If you want to go deeper, compare this guide with GST Registration. Then update the decision only after the official source and your own records agree.

GST vs VAT in India: What Changed in 2017 and Where VAT Still Applies (2026)