The basic concept of vat

In ideal VAT regime set off is allowed for all the taxes paid on purchases irrespective of its use. This increases cost of production.

Features of vat

In aforesaid example, if D is exporting his product or his service, such exports cannot be made tax free, since Government does not know how much tax was paid earlier and cannot give relief. The inter-state sellers are required to open local depots to retain their business. VAT has earned a negative connotation in some parts of the world where it has been introduced, even hurting its proponents politically. Normally, such disposal are made locally and most of the State tax laws have subjected them to tax. Again the trader has 30 days to notify Customs and Excise but here he will be registered from day 1 of the day period. The trader may request an earlier date if he wishes. This cumulative period must not exceed 12 months. In essence, this is Australia's program of horizontal fiscal equalisation. Most industrial countries with a VAT adopted their systems in the s. Pure Beverages Ltd. It is charged as a percentage of price, which means that the actual tax burden is visible at each stage in the production and distribution chain. The rights and obligations of the dealer such as obtaining registration, procuring blank declaration forms, payment of taxes, assessment, appeals and also application of rules framed by the state under the authority of section 13 of the Act are all in relation to the appropriate state. But in the years that followed its implementation, the population eventually accepted the tax.

Despite efforts to close tax loopholes that allow internet companies to avoid charging customers taxes in states where they do not have a brick-and-mortar business, unpaid taxes on online sales cost states billions in potential income that could fund schools, law enforcement and other services.

The provisions for check posts are also worrying them equally. Compare Investment Accounts.

vat law

Thus, tax is paid again and again on the material which has already suffered tax. However the said percentages are still not prescribed and hence the sale price has to be decided as per above judgment.

A dealer can purchase goods inter -state and makes sale within the State. Advani Orlicon Pvt. However, the question assumes importance when the movement is not direct as given above.

Indian states have opted for tax credit method.

vat vs sales tax

Even so, better-off consumers could ultimately benefit if a VAT replaced the income tax: As with other flat taxesa VAT's impact would be felt less by the wealthy and shouldered more heavily by the poor, who spend a larger percentage of their take-home pay on necessities.

There are number of changes due to amendments or due to important judgments giving different interpretations.

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Basic Concept of VAT