Full Form of VAT:
Value Added Tax
VAT Full Form is Value Added Tax. VAT is a tax that is related to product consumption or service availability. VAT is generally referred to as the extra cost price that a consumer has to pay. It is a form of indirect tax that is based on the valued added of consumable goods. The concept of Vat was first proposed in 1918 but it was introduced for the first time in 1954. The system of VAT is used throughout the globe as it contributes heavily to the GDP of the nation.
VAT is implemented as a tax system at every stage of production to the final sale point of the value added of the consumable goods. It is set by the transferor. It cannot be termed as a merely profitable system. VAT is determined upon the tax on the value added of a product that is the difference between the sale price of a particular product and the cost price (including taxes) of the materials and labor charges. It is only applied to the end consumer or final customer.
To implement VAT upon a product, business organizations have to register themselves under legalized systems. It is often confused with sales tax. But whereas sales tax is more profitable for business entities, VAT is beneficiary for the income of the state rather than certain business authorities.
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