BUISENESS MANAGEMENT
TAXES
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
helps people to buy everyday essentials
|
|
|
the VAT amount would be too low on the purchase
|
|
|
not enough fruit and veg is sold to generate money
|
|
|
encourages varying eating habits
|
Detailed explanation-1: -Value Added Tax (VAT) is a major source of revenue for all Indian states and union territories (except Andaman and Nicobar Islands and Lakshadweep). VAT was introduced as an indirect tax in the Indian taxation system to replace the existing general sales tax.
Detailed explanation-2: -VAT is designed to ensure that most forms of consumer spending are taxed evenly and fairly. VAT is not a tax on the seller for it is the buyer who pays the tax. VAT will not be an additional tax, but a replacement for some existing indirect taxes.
Detailed explanation-3: -When the tax is included in all the stages of the production, it will reduce the evasion of the tax by the individuals. But tax avoidance can be done in VAT by transferring the tax burden to another individual by increasing the price of the product which the consumer buys.
Detailed explanation-4: -The purpose of VAT is to generate tax revenues to the government similar to the corporate income tax or the personal income tax. The value added to a product by or with a business is the sale price charged to its customer, minus the cost of materials and other taxable inputs.