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Income Tax Calculator

Income Tax Calculator

Calculate your income tax well in advance, so that you have time to check, file and get refund on time.

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Income Tax Dates

Income Tax Date

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Permanent Account Number

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Deduction is the word - everyone likes only at time of calculating tax. Know what deductions apply to you.

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Cities - Bihar

 

Important Facts About VAT (Value Added Tax)

We all are aware of the fact that we have to pay for VAT for goods and services we have received. It is considered to be a general consumption tax which is assessed on these items. This is the indirect tax which we have to pay for the consumption of these goods. The tax has to be paid by the original producers or the manufacturers upon the transfer or change in goods. This tax is mainly based on the value of the items or goods and it is associated with the difference in the value added by transferor and does not include profits. In India, VAT got introduced in year 2005.

It is a well known fact that VAT is payable on the goods & services all over the world. This is because of the reason that they form an important part of national Gross domestic products (GDP). VAT has been introduced in more than 130 countries world wide for more than three decades. This form of tax has been introduced in India after many years. All sellers and service providers charge the tax after they have availed input tax credit. The dealer chargers VAT on full value of the goods which have been sold to the consumers. In the end of tax period, he reduces the tax received on sales and the tax charged to him by the dealers whom he had purchased the goods from and deposits the tax in government treasury.

It is considered to be a multi-stage tax and the main aim is to avoid cascading as it may have great impact on the price of goods. As it is a multi-staged tax, it results in the high revenues to government. Under VAT, there will be no exemption from making tax payments for goods and services. At every value addition stage, the tax will be added and hence the consumers and manufacturers are liable for paying VAT.

There are below mentioned advantages of VAT

Revenue security- In VAT system, the buyers at the final stage will have an interest in undervaluing the purchases. This is because of the fact that the deduction system makes sure that buyers at previous stages get the tax refunded on the items purchased by them. This is how a tax lose can be minimized at the final stage.

Selectivity- VAT is applied to the specific items or goods and services offered by business owners. It does not cover capital goods due to the type of consumption.

Disadvantages of VAT

  • This form of tax is difficult to operate from both business and administration position.
  • It is quite regressive
  • This tax favors capital intensive firms

It is a well known fact that in India, there are two reasons for introduction of VAT. One is it will make a part of fiscal consolidation strategy at macro level for the country. Secondly, it will help nation in International trade. If you want to get more details about this form of tax, you can get in touch with tax consultants.