GK
INDIAN ECONOMY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Directly on consumer
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On final stage of production
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On first stage of production
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On all stages between production and final sale
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Detailed explanation-1: -The correct answer is On all stages between production and sale. A VAT is an abbreviation for Value-Added Tax, which is a tax levied on businesses at any stage of the manufacturing and distribution process, usually when a commodity is resold or given a monetary value.
Detailed explanation-2: -While VAT is levied on the sale of goods and services and paid by producers to the government, the actual tax is levied from customers or end-users who purchase these goods and services. Thus, it is an indirect tax which is paid to the government by customers but via producers of goods and services.
Detailed explanation-3: -VAT applies to practically all sales of services and imports, as well as to the sale, barter, exchange, or lease of goods or properties (tangible or intangible). The tax is equivalent to a uniform rate of 12%, based on the gross selling price of goods or properties sold, or gross receipts from the sale of services.