V Majority of the States have already

implemented VAT from 1.4.2005.

V Value Added Tax is a multi-point sales tax

with set off for tax paid on purchases.

V A tax on the value addition on the product.

V Burden of tax is ultimately borne by the

consumer
V jncourage people to pay taxes.

V Avoid double taxation(cascading effect).

V Bringing uniformity in taxes(state/central).

V Avoiding additional tax, surcharge, turnover

tax
V =evied on the total value of goods.

V Increases tax burden on the final

consumer.

V It is payable if there is processing.

V Registered users won·t pay sales tax

again.
 SUPP=IjR MANUFACTURjR
SP = Rs 200
SP = Rs 100 GV @ 12.5% = Rs 25
Vat @ 12.5 % Net Vat = 25 -12.5

= Rs 12.5 = Rs 12.5

RjTAI=jR WHO=jSA=jR
SP = Rs 400 SP = Rs 300
GV @ 12.5% = Rs 50 GV @ 12.5% = Rs 37.5
Net Vat = 50 ² 37.5 Net Vat = 37.5 ² 25

= Rs 12.5 = Rs 12.5
p

 
 

p
   p 

Government

Vendors
Tax

Manufacturer Distributor Goods

Retailer
 CjNTRA= SA=jS TAX VAT
V Paid on total amount V Paid on value addition

V Bourne be single dealer V Shared by all parties

V Double taxation possible V No cascading effect

V More burden on consumer V =ess burden on retailer

V High tax evasion possible V =imited or no tax evasion

V Under Central Govt. V Under State govt.

V Inter state tax V Intra state tax

V Reduction in tax evasion

V Spreading of tax burden over all parties.

V Helps in boosting trade in particular state

V Simplicity and transparency

V jasy cross checking by Govt.

   

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V "
    

    
V jvading of VAT is difficult than CST

V Overvaluing of purchases

V Full cash transaction