VAT stands for Value Added Tax. It is a common form of indirect tax which is imposed only on tangible goods or products. It is imposed at each stage of production involved in turning raw material into finished goods and at the point of sale.
What is the full form of VAT ?
“Value Added Tax is a form of indirect tax imposed only on tangible goods and products. It does not applies on services, because a service tax is levied separately on them. From the perspective of the buyer, it is a tax on the purchase price. In India, VAT is collected by the Central and state governments, and the rate at which the tax applies varies from state to state”.
What does VAT mean?
“Value Added Tax (VAT) is a tax placed on goods at the time of sales. A VAT is a type of tax assessed based on the increase in the value-added to a product at each stage of production to the point of sale”.
VAT is not applicable on services as service tax is imposed separately on services. It is collected by the Central and State governments. Its chargeability varies from state to state. VAT is implemented in almost all countries in the world as it contributes significantly to the GDP of a country.
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