Basic knowledge of vat , how we calculate
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
21 November 2011
full knowledge of vat ,calculation of vat,c form in vat calculation , where we use vat, difference between vat and sale tax
21 November 2011
What is VAT?
• It is nothing but Sales Tax.
• It is a multi-point sales tax.
• It is collected on value addition only at each stage.
• Tax paid by the dealer is deducted from the tax payable collected at every point of sale and the tax already paid.
How to calculate VAT?
VAT is calculated by deducting tax credit from tax collected during the payment period.
Example:
(Rate of tax assumed at 10%).
Purchase Price Rs.100.
Tax paid on purchase Rs. 10(input tax).
Sale Price Rs. 150.
Tax payable on sale price Rs. 15(output tax).
Input tax credit Rs. 10.
VAT payable Rs. 5.
Total tax collection by govt. --------
On the sale price of Rs. 100 paid on the purchase by the dealer Rs. 10.
Net VAT paid by the dealer on value addition after resale Rs. 5.
Total tax at 10% on the last sale price of RS. 150 Rs. 15.
https://www.caclubindia.com/experts/what-is-vat-821600.asp
What is VAT?
• It is nothing but Sales Tax.
• It is a multi-point sales tax.
• It is collected on value addition only at each stage.
• Tax paid by the dealer is deducted from the tax payable collected at every point of sale and the tax already paid.
How to calculate VAT?
VAT is calculated by deducting tax credit from tax collected during the payment period.
Example:
(Rate of tax assumed at 10%).
Purchase Price Rs.100.
Tax paid on purchase Rs. 10(input tax).
Sale Price Rs. 150.
Tax payable on sale price Rs. 15(output tax).
Input tax credit Rs. 10.
VAT payable Rs. 5.
Total tax collection by govt. --------
On the sale price of Rs. 100 paid on the purchase by the dealer Rs. 10.
Net VAT paid by the dealer on value addition after resale Rs. 5.
Total tax at 10% on the last sale price of RS. 150 Rs. 15.
https://www.caclubindia.com/experts/what-is-vat-821600.asp
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