Value Added Tax - PowerPoint PPT Presentation

About This Presentation
Title:

Value Added Tax

Description:

Value Added Tax is levied on the sale of goods, services paid by manufacturers to the government. Check the details regarding VAT – PowerPoint PPT presentation

Number of Views:79
Slides: 12
Provided by: professional5
Category: Other

less

Transcript and Presenter's Notes

Title: Value Added Tax


1
VALUE ADDED TAX (VAT)
  • Powered By http//www.taxqueries.in/

2
CONTENTS
  • VAT Introduction
  • Features of VAT
  • Advantages of VAT
  • Goods on which VAT does not apply
  • Reverse Charge

3
VAT INTRODUCATION
  • Value Added Tax collection is a process of
    levying certain charges on goods, services and
    transaction by a governing authority to provide
    the public services. 
  • It is one of the leading powers held by the
    government of India.
  • Different types of taxes are applicable at
    various stages of the sale of goods and services
    VAT is one such tax

4
VALUE ADDED TAX
  • VAT is a kind of tax which levied on the sale of
    goods and services when these goods are
    ultimately sold to the consumer.
  • VAT Tax is an integral part of the GDP (Gross
    Domestic Product) of any country.
  • VAT is imposed on intrastate sale that is the
    sale of goods within the state. VAT is a tax on
    value addition on the goods.

5
  • While Value Added Tax is levied on the sale of
    goods, services paid by manufacturers to the
    government, the actual tax is levied on end users
    who purchase these goods.
  • Hence, VAT is an indirect tax which is given to
    the government by consumers but via manufacturers
    of goods and services.
  • It is a multi-stage tax which is levied at each
    step of production of goods and services which
    involve sale/purchase.

6
FEATURES OF VAT
  • The Homogeneous (similar) goods and services are
    taxed uniformly. So the similar product from all
    brands will be taxed the same.
  • Value Added Tax reduces chances of tax evasion
    and support compliance.
  • VAT is levied at each stage of production of a
    good to makes the taxation process easier and
    more transparent.
  • Encourages transparency in the sale of goods and
    services at the small-scale level.
  • VAT avoids Cascading Effect of Tax.

7
ADVANTAGES OF VAT
  • It becomes easier to give tax concessions to
    goods used by the common man or products used
    for the manufacture of capital assets or exported
    goods.
  • Exports can be freed from domestic trade taxes.
  • It provides an instrument of taxing consumption
    of goods and services.
  • Interference in market forces is minimum.
  • Simplicity and transparency.
  • Tax rates can be lower as the tax is levied on
    the retail price and not at the wholesale price.

8
GOODS ON WHICH VAT DOES NOT APPLY
  • VAT does not apply to the products where price is
    determined by the government intervention such
    goods as follows.
  • Petrol, Diesel or other motor spirits.
  • Liquor.
  • Lottery Tickets.

9
REVERSE CHARGE
  • Normally, VAT is payable by the seller of goods.
  • However, in some cases, the liability is cast on
    the purchaser of goods, known as Reverse
    charge.
  • In reverse charge, the service receiver also acts
    as the service provider. He pays tax on services
    received by him. He can avail Cenvat credit of
    tax paid by him since the service is his input
    service.
  • There is a provision of tax collection at
    source under section 206C of Income Tax Act.
    Here, the manufacturer or seller of liquor is
    liable to pay tax at source.

10
CALCULATION OF VAT
  • Value Added Tax is calculated as the difference
    between input tax (Purchase Price) and output
    tax(Sale Price).
  •  VAT is known as the tax on value added, or VAT
    Tax as it is imposed on the amount of value
    addition made. 
  • VAT Sale Price Purchase Price.

11
THANK YOU
For more details http//www.taxqueries.in/vat/valu
e-added-tax-vat/
Write a Comment
User Comments (0)
About PowerShow.com