VAT Return

Updated: 01-09-2019 09:47:06 AM

Value Added Tax (VAT) is one of the revolutionary tax reforms introduced in the Indian economic system. It was introduced to remove the complications in the tax structure and to bring in more transparency and effectiveness in to the taxation system. It’s a state-level, multi-stage taxation structure. That means, taxes are collected in installments or at different stages of production and distribution of goods and services. VAT system of taxation is adopted in almost all the states of the country. VAT VAT Return is collected at various points of production and sales with a provision of ‘input tax credit (ITC)’ to the seller which can be claimed against the tax liability on subsequent sale. Ultimately, value added tax is borne by the final consumer of the product  and gets paid by the manufacturer to the government.

Collection of value added tax is destination based. It’s basically levied on the place of final consumption of goods and services and is categorized in the following ways:

• Intra-state (goods and services consumed within same state)
• Inter-state (movement of goods between two or more states)
• Import of goods and services.