Vat: What is VAT

What is VAT ? Value Added Tax ( VAT ) is an indirect value added tax which was introduced into Indian taxation system on 1st April 2005. A value-added tax ( VAT ) is a consumption tax levied on a commodity whenever it adds value at any point in the supply chain, from production to sale. If you’re curious about the full form of VAT tax, here’s your answer: VAT stands for Value Added Tax, meaning a tax collected at each stage of production and distribution of goods. While the Goods and Services Tax (GST) has replaced most indirect taxes since 2017, some goods still fall under the old VAT system. Here, we will help you understand the value added tax meaning, how it works and where it still applies today. Keep reading to get clear insights into VAT and its role in India’s ... A value-added tax ( VAT or goods and services tax (GST), general consumption tax (GCT)) is a consumption tax that is levied on the value added at each stage of a product's production and distribution. VAT is similar to, and is often compared with, a sales tax. VAT is an indirect tax, because the consumer who ultimately bears the burden of the tax is not the entity that pays it. Specific goods and services are typically exempted in various jurisdictions. Products exported to other countries ... VAT Rates in India VAT or Value Added Tax is a tax added to the goods at each step of the production and distribution process. VAT tax however is ultimately paid by the end consumer, as dealers are allowed to collect VAT tax on their sales, retain the tax paid on their purchases and only pay the balance to the Government. Unlike service tax, VAT is still governed by the State Government by separate VAT act passed by each of the state in India under the guidelines issued by an Empowered ...