Scribd
Upload
40 views

Topic:-: Presented By-Ankit KR Jain Anuj Kanoo Sadik Ahmed Choudary

VAT is an indirect tax on goods that is imposed only on the amount of value added at each stage of production and distribution. It was first implemented in Germany and France during World War I and later introduced in India in 2005. There are different types of VAT including production, income, and consumption types. VAT is taxable at every point of sale, levied on value addition, collected as part of the sale price, and has no cascading effect. It aims to avoid double taxation and cascading taxes while simplifying the tax structure. Advantages include preventing cascading taxes and improving compliance, while disadvantages are that it has a complicated system and high administrative costs.

Uploaded by

Ankit Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
40 views

Topic:-: Presented By-Ankit KR Jain Anuj Kanoo Sadik Ahmed Choudary

VAT is an indirect tax on goods that is imposed only on the amount of value added at each stage of production and distribution. It was first implemented in Germany and France during World War I and later introduced in India in 2005. There are different types of VAT including production, income, and consumption types. VAT is taxable at every point of sale, levied on value addition, collected as part of the sale price, and has no cascading effect. It aims to avoid double taxation and cascading taxes while simplifying the tax structure. Advantages include preventing cascading taxes and improving compliance, while disadvantages are that it has a complicated system and high administrative costs.

Uploaded by

Ankit Jain
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 9

TOPIC:-

Presented by-
Ankit Kr Jain
Anuj Kanoo
Sadik Ahmed Choudary
What is VAT?

• Value added tax (VAT) is an indirect tax


on goods.Vat is imposed only on the
amount of value addition. It is a multi-
point tax levied as a proportion of value
addition, where the tax burden can be
shifted from one person to another person
till the ultimate consumer can consume
the goods.
History:-

• Germany and France were the first countries to implement VAT, doing so in
the form of a general consumption tax during World War I. The modern
variation of VAT was first implemented by France in 1954 in Ivory Coast
colony. Recognizing the experiment as successful, the French introduced it
in 1958.
• VAT was introduced into the Indian taxation system from 1 April 2005. Of
the then 28 Indian states, eight did not introduce VAT at first instance.
There is uniform VAT rate of 5% and 14.5% all over India. The government
of Tamil Nadu introduced an act by the name Tamil Nadu Value Added Tax
Act 2006 which came into effect from the 1 January 2007. It was also
known as the TN-VAT.
Types of VAT

• Production type VAT: While calculating the amount of value addition by a firm,
the amount of total expenditure incurred by a firm is deducted from sales
income of the firm.
• Income type VAT: While calculating the amount of value addition by a firm,
along with the amount of depreciation charged on capital goods is deducted
from sales income of the firm.
• Consumption type VAT: While calculating the amount of value addition by a
firm, the amount of total expenditure incurred by a firm (including the amount
spent on purchase of capital goods) is deducted from sales income of the firm.
Features of VAT:

• Taxable at every point of sale.


• Tax levied on value addition.
• Collected as a part of sale price.
• No cascading effect.
• Not a burden on dealer.
• Uniform rate at every point of sale.
• Burden on ultimate consumer.
Objectives of VAT:

• Avoidance of Double Taxation and Cascading effect of


Tax.
• Reduction in cost.
• To avoid multiplicity of the present tax structure.
• To eliminate avoidance of tax.
• Introduction of Self-Assessment system.
Advantages of VAT

• VAT prevent cascading tax.


• VAT improves compliance.
• VAT is transparent.
• VAT provides a larger tax base.
• VAT encourages investment.
Disadvantages of VAT

• Complicated system.
• High Administrative Cost.
• Reduces Revenue of the Government.
Thank You!

You might also like