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

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.

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:

1. Petroleum crude
2. High-Speed Diesel (HSD)
3. Motor Spirit (Petrol)
4. Natural gas
5. 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:

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:

1. Log in to gst.gov.in with the PID
2. Complete enrolment with PAN, business details, and bank info
3. Receive a Provisional Registration Certificate (Form GST REG-25)
4. Within 90 days, complete final registration to convert to a regular GSTIN
5. 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):

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 more on what GST replaced and how it works today, see our GST registration complete guide or the GST vs income tax breakdown.