what is vat?

Question

VAT TREATMENT IN WESTBENGAL

Answer 1

Vat and VAT may refer to:

Value added tax
a type of barrel used for storage
a tank, often constructed of welded sheet stainless (corrosion resistant) steel, used for holding, storing and processing liquids such as milk, wine and beer
Virtual Allocation Table, a component of the Universal Disk Format
a form of Vietnamese wrestling

Answer 2

V alue A dded T ax



a tax levied on the difference between a commodity's price before taxes and its cost of production


OF WEST BENGAL, FINANCE, FINANCE DEPARTMENT, DIRECTORATE, DIRECTORATE OF SALES TAX, ... All the dealers registered under the WBST Act 1994, VAT Act 2003, Try this website






wbcomtax.nic.in/vatforms.htm ...


Currently set at 14%, Value Added Tax (VAT) is included in the price of most goods ... The amount of VAT charged, or a statement that VAT is included in the

Answer 3

The value added tax - Means increasing tax as value of the good increases in the chain of supply. For example a manufacturer sells his produce at Rs.100 to a distributor with 4% tax.(Total Rs.104) Then the distributer sells it to the whole sale dealer at Rs.110with 4% tax(Total price including tax is now 114.40) and again the dealer sells it to the retailer at Rs. 120 with 4% tax So the price now comes to Rs. 124.80 and he sells the ultimate customer at Rs.130 and 4% tax. That means the customer pays Rs. 135.20 including tax. So the tax increases at every point when the value of the product is increased. When the reseller sold the product at Rs. 135.20 Rs.5.20 is the VAT he collected from the customer. But he paid a tax to the whole sale dealer a tax of Rs.4.80. As per VAT rules he can deduct this from the 5.20 he collected and to remit only 40 paise to the government. Similarly the whole sale dealer, the distributor etc will also remit to the government the excess amount of tax he collected for his profit or value addition to that product. Even the manufacturer can claim exemption for the extent of tax he paid for acquiring the raw materials.

Answer 4

Value added tax (VAT) is tax on exchanges. It is levied on the value added that results from each exchange. It differs from a sales tax because a sales tax is levied on the total value of the exchange. For this reason VAT is neutral with respect to the number of passages that there are between the producer and the final consumer.

VAT is an indirect tax, in that the tax is collected from someone other than the person who actually bears the cost of the tax (namely the seller rather than the consumer). To avoid double taxation on final consumption, exports (which are, by definition, consumed abroad) are usually not subject to VAT or VAT which led to such consequences is refunded.

VAT was invented by a French economist in 1954. Maurice Lauré, joint director of the French tax authority, the Direction générale des impôts, as taxe sur la valeur ajoutée (TVA in French) was first to introduce VAT with effect from 10 April 1954 for large businesses, and extended over time to all business sectors. In France, it is the most important source of state finance, accounting for approximately 45% of state revenues.

Personal end-consumers of products, consumers and services cannot recover VAT on purchases, but businesses are able to recover VAT on the materials and services that they buy to make further supplies or services directly or indirectly sold to end-users. In this way, the total tax levied at each stage in the economic chain of supply is a constant fraction of the value added by a business to its products, and most of the cost of collecting the tax is borne by business, rather than by the state. VAT was invented because very high sales taxes and tariffs encourage cheating and smuggling. It has been criticized on the grounds that it is a regressive tax.

Answer 5

VAT is value added tax.
If you ask about VAT treatment, then the treatment is that VAT you have paid to your suppliers on purchases can be claimed as credit in VAT payable on your sales.
I will suggest you a very good website.... http://www.statevat.com/

Answer 6

Value Added Tax

Answer 7

Click on the link below and know all about VAT in West Bengal
http://allindiantaxes.com/vat-west-bengal.php

Answer 8

Value Added Tax imposesd by State Govt. It is new name to Sales Tax.

Answer 9

A brief on VAT (Value Added Tax)
What is VAT?
VAT is a multi-stage tax levied at each stage of the value addition chain, with a provision
to allow input tax credit (ITC) on tax paid at an earlier stage, which can be appropriated
against the VAT liability on subsequent sale.
VAT is intended to tax every stage of sale where some value is added to raw materials,
but taxpayers will receive credit for tax already paid on procurement stages. Thus, VAT
will be without the problem of double taxation as prevalent in the present tax laws.
Presently VAT is followed in over 160 countries. The proposed Indian model of VAT
will be different from VAT as it exists in most parts of the world. In India, VAT will
replace the existing state sales tax system.
One of the many reasons underlying the shift to VAT is to do away with the distortions in
our existing tax structure that carve up the country into a large number of small markets
rather than one big common market. In the present sales tax structure tax is not levied on
all the stages of value addition or sales and distribution channel which means the margins
of distributors/ dealers/ retailers et al are not subject to sales tax at present.
Thus, the present pricing structure needs to factor only the single-point levy component
of sales tax and the margins of manufacturers and dealers/ retailers etc, are worked out
accordingly.
Under the VAT regime, due to multi-point levy on the price including value additions at
each and every resale, the margins of either the re-seller or the manufacturer would be
reduced unless the ultimate price is increased.
Implementation status: States To Introduce VAT w.e.f April 1, 2003
The States have reiterated their commitment to introduce Value Added Tax (VAT) from
April 1, 2003, after the Centre agreed to compensate them for any revenue loss due to the
introduction of this new taxation measure by up to 100 per cent.
The States, on their part, have decided that all their VAT legislation would have common
provisions in respect of all important matters and a simple VAT law will replace the
existing plethora of State laws such as those on sales tax, turnover tax, purchase tax, entry
tax, and the like.
The VAT by the States would have two basic rates of 10 per cent and 12.5 per cent,
which would be revenue neutral rates for most items.. The two basic rates have been
selected so that States, which have lower sales tax rates, could raise it to 10 per cent
while those levying higher rates of 17-18 per cent would have to lower them to 12.5 per
cent. Over time, the VAT rates would be merged into one uniform rate. It has also been
decided to phase out Central State Tax (CST) within three years with the introduction of
VAT as this causes distortions in internal trade and impeded development of a common
market.
Problems with present sales tax system:
At present the sales tax is levied on the gross value without allowing any credit or set-off
for the taxes paid on inputs (i.e., tax is levied on gross value). Consequently, it tends to
create the phenomenon of cascading resulting in increased consumer prices by an amount
higher than what accrues to the exchequer by way of revenues from it.
Also, there is the problem of multiplicity of rates. All the states, provide for plethora of
rates.. These range from one to 25 per cent. This multiplicity of rates increases the cost of
compliance while not really benefiting revenue. Heterogeneity prevails in the structure of
tax as well. Apart from general sales tax, most states levy an additional sales tax or a
surcharge. In addition, the states levy luxury tax as also an entry tax on the sale of
imported goods.
All these practices of heterogeneity in structure as well as rates cause diversion of trade
as well as shifting of manufacturing activity from one state to another.
Further, widespread taxation of inputs relates to vertical integration of firms, i.e., the
existing system of taxes militates against ancillary industries and encourages them to
produce more and more of the inputs needed rather than purchase them from ancillary
industries.
The existing system of commodity taxes is non-neutral. It interferes with the producers'
choice of inputs as well as with the consumers' choice of consumption, thereby leading to
severe economic distortions2.
How can VAT address these issues:
VAT would not cause cascading, nor would it cause vertical integration of firms. Also, it
provides total transparency of the incidence of tax. This is because, VAT is a multi-stage
sales tax levied as a proportion of the value added. It is collected at each stage of the
production and distribution process, and in principle, its burden falls on the final
consumer.
Another feature of VAT regime is discontinuation of the sales tax based incentives to
new industrial units. Until now, all the states were granting such incentives to new
industries. in the form of exemption from tax on the purchase of inputs as well as on the
sale of finished goods, sales tax loans and/or tax deferral.

Answer 10

It is VALUE ADDED TAX.