Value added tax and its features

Taxes are levied by the government to earn income. The income earned by the government is spent on the various economic development activities. The spending of defense is one of the major parts of the government spending.  Taxes are decided by the central and state governments. Some municipalities also levied the taxes, which are taken within their jurisdictions.

There are two kinds of taxes generally paid by the citizens of this country. One is direct and another indirect taxes. Income taxes, wealth tax, expenditure tax, gift tax, are examples of direct tax. These taxes are paid by the individuals.  Indirect taxes are sales tax, values added tax, service tax, excise duty, custom duty and export duty. The indirect taxes are not paid by the individuals. They are also not binding, because they are paid only when certain services are used by the individuals.

Value added tax –

This is the tax Auditing services in Delhi NCR that is paid by the original producer of the goods and services .The goods and services are consumed by the customers. The tax is paid by them in the form of increased price of these goods and services.  Value added tax is an important part of the tax structure of the country. Every producer of goods and service provider takes tax from the consumers and pays that to the government. Any person who gets income of more than 5 lacs by making or supplying goods and services is supposed to register for value added tax. It is imposed on both local goods and imported goods. It has become one of the most important taxes for the economy of the country.

The main features of the value added tax –

All the goods have same tax on them. For example a brand of television in one state will have same value added tax as in other state, provided they are not controlled by the state governments it is also levied at the successive stage of production of goods and services. The value added tax is collected VAT Consultants in Delhi NCR at every stage of production of goods, so that the end user does not have to pay the whole tax .This tax brings uniformity and fairness to the tax structure. Value added tax ensures better compliance and the possibility of tax evasion is very less. The value added tax encourages the transparency in the selling of goods and services.

Since value added tax is neutral and transparent, it has emerged as the vital instrument of revenue collection for the government