Abhi (Finance) (94 Points)
18 December 2009
Dear All,
Usually in all documents they mention that VAT avoids the double taxation compared to the earlier sales tax method. But the earler method was levying double tax am not uderstanding. I request you, please, give one example for this Sirs.
Regards,
AMIT KAPOOR
(SELF EMPLOYED)
(491 Points)
Replied 19 December 2009
VAT avoid the cascading effect before vat cost of product increase from the point of manufacturing of goods to pioint where end consumer consume the goods and at every stage trader or manufacturer has to pay tax on tax which was already suffered by previous trader or manufacturer in other word by allowing the credit on the purchase of goods vat avoid the cascading effect now at every stage whether it is trading stage or manufacturing stage both the trader or manufacturer has to pay tax on valued added by such manufacturer or trader
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