General Definition of Goods under VAT

• Under VAT laws, “goods” refer to all kinds of movable property that are involved in trade or commerce
  
• The term includes tangible products that can be bought, sold, transferred, or exchanged
  
• Goods can be manufactured, processed, or produced for consumption or resale
  
• VAT is levied on the sale of goods, not on services (though some services were taxed under Service Tax pre-GST)
  
• The definition is derived from state VAT Acts, which often align with the Sale of Goods Act, 1930

Types of Goods Covered Under VAT

• Raw materials, finished products, and semi-finished goods used in manufacturing or resale
  
• Consumer goods such as electronics, clothing, packaged food, and furniture
  
• Capital goods like machinery, tools, and equipment used in business operations
  
• Livestock, agricultural produce, and forest products (where applicable)
  
• Petroleum products, alcoholic beverages, and tobacco, which remained under VAT post-GST

Exclusions from the Definition of Goods

• Money and actionable claims are generally excluded from the definition of goods
  
• Immovable property, including land and buildings, are not classified as goods under VAT
  
• Electricity and water supply may be excluded or separately taxed under specific regulations
  
• Services like professional consultancy, software as a service, or maintenance were not taxed under VAT
  
• Certain intangibles like goodwill or copyright may fall outside the scope, depending on state laws

Legal Interpretation and Scope

• The definition of goods was interpreted broadly to include goods in any form – solid, liquid, or gas
  
• Courts have clarified that even computer software sold on physical media can be treated as goods
  
• Packaging materials and containers sold with goods are also included in the sale value for VAT
  
• Some state VAT Acts explicitly listed goods in Schedules to define tax rates and exemptions
  
• The term “goods” includes branded and unbranded products, with taxation often differing accordingly

Transition to GST and Relevance of VAT Definition

• With the introduction of GST, the taxation on goods and services was merged into a single tax regime
  
• However, VAT still applies to petroleum products, alcohol, and certain local transactions
  
• The VAT-era definition of goods remains relevant for legacy cases, audits, and appeals
  
• Businesses dealing in such items must still understand the VAT classification of goods
  
• The legacy definition continues to guide interpretation in pre-GST litigation and assessments