How To File VAT Return Online?

6 mins read
by Angel One
Learn how e-filing returns of VAT is an excellent way for you to keep up with your taxation requirements.

VAT Return E-Filing

Value Added Tax (VAT) is a consumption tax levied on the incremental value of goods and services at each stage of the production and distribution process. Essentially, the tax is applied to the difference between the purchase price of a product and the selling price after adding value. This applies to all interstate purchases and sales within the system.

The implementation of Value Added Tax (VAT) has brought several advantages for businesses and the government. It has streamlined and simplified the taxation process, making it more efficient and transparent for all parties involved.

The registration for VAT is compulsory for all businesses with an annual turnover over ₹5 lakh. The registration process typically takes between 20 and 40 days for approval. Once approved, businesses can electronically file their VAT returns on the state’s Commercial Taxes website and make online payments for the collected tax amount.  The frequency of filing these returns varies depending on the business’s turnover and specific state regulations, ranging from monthly to quarterly submissions.

How to Access the Online VAT e- Filing System?

The VAT e-filing system provides secure access for registered businesses under the VAT Act 2003.  To log in, authorised users require a unique User ID and password. These credentials are issued by the Directorate of Commercial Taxes.  In case login details are forgotten, the Directorate’s help desk can assist with retrieval.

Prerequisites for e-Filing VAT Returns

Before you decide to file VAT returns online, you have to have the following things ready for the VAT e-filing system:

  1. TIN Number: The 11-digit Tax Identification Number or TIN is provided by the state government’s tax department. It helps to track payments and previously-filed returns.
  2. Login Details: You must have the User ID and password for logging in that have been provided to you by the Tax Directorate Office.
  3. E-filing Software: Once you log in to the online portal, you can access the e-filing software that can take in your filing data and process it into XML.
  4. VAT Receipts: You will need the challan numbers of the VAT receipts against which you have made payments in the preceding period.

If you have all the above material handy, you are ready to start filing your VAT return. The process could take 2 to 6 months, depending on what is the total number of VAT receipts.

How To File VAT Return Online?

Below you can find all the steps that you should follow for VAT return e-filing:

  1. Access the Portal: Navigate to the online portal of your state’s Directorate of Commercial Taxes. Each state manages its own VAT e-filing system, but the general procedures are similar.
  2. Secure Login: Enter your unique User ID and password to access the system. These credentials are issued by the Directorate. If you’ve forgotten them, contact their help desk for assistance.
  3. Form Acquisition: Download the required form, typically Form 14D, in a compressed format. Once unzipped, you’ll find a fillable PDF document.
  4. Data Entry:  Meticulously complete the downloaded Form 14D and its associated annexures with details from your VAT receipts and other relevant records. This process may take time, depending on the number of transactions involved.
  5. XML Generation:  Utilize the software provided by the Directorate’s online portal to convert the completed Form 14D into an XML file (Extensible Markup Language) for digital processing. Note that only Form 14D requires XML conversion, not the annexures.
  6. File Submission:  Upload both the generated XML file and the completed annexures through the e-filing portal.
  7. Error Correction: The system automatically verifies the uploaded data. Ensure all information is accurate to avoid prompts for correction.
  8. Confirmation Receipt:  Upon successful submission, an acknowledgement receipt will be generated as proof of your VAT return filing for that period. You can download or print this receipt for your records.

Once all the forms have been submitted successfully, you will receive an acknowledgement receipt. This is the proof of your VAT returns filing for that month, which you can download or print.

Also Read More About How to File TDS Return?

Who Needs to File VAT Returns?

In India, the responsibility of filing VAT returns falls on all businesses engaged in the production or sale of goods and services. This encompasses various entities, including manufacturing and trading businesses, partnership firms, sole proprietorships, and private limited companies.  The annual turnover threshold for mandatory VAT registration is typically ₹5 lakhs, though this figure can be subject to change based on individual state laws.

Even businesses with turnovers below the mandatory registration threshold can choose to register for VAT.  This provides them with the advantage of issuing tax invoices to their customers.

VAT is a multi-stage tax, meaning it’s collected at each stage of the production process.  Businesses will retain a portion of the VAT collected from their customers, while the remaining amount needs to be remitted to the government through designated banks at specified intervals, typically monthly.

Benefits of Filing VAT Returns Online

E-filing of VAT returns has several advantages over manual filing as well. Some of the key benefits are listed down:

  1. Reduced Processing Time: Manual filing, especially for businesses with numerous transactions or variable VAT rates, can be a time-consuming process that takes days to complete.  E-filing streamlines the process, allowing completion in a matter of hours, saving valuable time and resources.
  2. Instant Error Detection: Uploading the VAT return form in XML format to the e-filing portal provides real-time feedback. The system automatically identifies any inconsistencies or errors, providing immediate notification and guidance on rectification. Additionally, most state portals offer comprehensive FAQs to address common filing issues.
  3. Secure Record Keeping: Traditional paper receipts are susceptible to loss or damage, potentially causing problems during tax audits. E-filing eliminates this concern as all return information is securely stored electronically and easily accessible to tax authorities for verification.
  4. Enhanced Communication: Your e-filing account acts as a central communication hub with the government. It receives all important notifications, including any missing information or clarification requests, ensuring you stay up-to-date on filing requirements. Conversely, if no documents or clarifications are requested upon logging in, you can be confident your filing is complete.

Overall, e-filing simplifies the VAT return process, saving time, improving accuracy, and facilitating better communication with tax authorities.

Final Words

VAT return filing is less intimidating than it looks like. Similarly, earning high returns from the stock market is also possible if you are willing to learn. Open a free demat account with Angel One today to start your investment journey! 


Who is required to e-file VAT returns?

In most countries, businesses exceeding a certain threshold in annual turnover must register for VAT and e-file their returns. In India, the threshold is an annual turnover over ₹5 lakh..

What are the benefits of e-filing VAT returns?

E-filing is faster, more secure, and offers real-time feedback on potential errors. It also eliminates the need for storing paper records.

What information do I need to e-file my VAT return?

You’ll typically need details on VAT receipts, TIN, login details, etc.

How do I submit my VAT return electronically?

Most tax authorities provide a dedicated online portal. You may need to register for an account and upload your return in a specified format.