I HAVE NOT UNDERSTOOD HOW VAT OPERATES.
PLEASE GIVE EXAMPLE.
4 Replies
Preeti Puri
(MBA(F)&Student CS Final)
(21 Points)
Replied 09 July 2011
VAT: value added tax.it is really easy to understand this concept.we apply vat on each stage of production process or you can say on each different layer of activity which adds value to the product.e.g if you take an example of a mill, when wheat is suplied to mill by wholeseller tax is charged,then tax will be charged on flour bags when sold to distributor/wholeseller then comes retailer or customers.customers are also sold bags after charging vat by distibutor.
in short when you buy raw material you are suppose to pay vat then finished goods are also sold after being charged vat.
CA ADITYA SHARMA
(CA IN PRACTICE )
(16719 Points)
Replied 09 July 2011
| Originally posted by : tanash_chak | ||
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nicceeeeeeee explaination above |
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