Thanks to the electronic media, we are now everyday dazzled by the advertisements dished out by multinational corporations. We know that they are doing brisk business in an ever-expanding fashion. The internal dynamics of the operations of such corporations are not known to the people at large. Our experience of a survey has taught us that those who are supposed to be the pillars of VAT are totally in the dark about it. The survey covered persons in different occupations, ranging from motor mechanics to wholesalers and retailers and the detailed results are incorporated in this article.
Input tax is the tax paid or payable by a registered dealer while purchasing goods. In the eyes of suppliers, retailers, manufacturers and dealers, VAT means the difference between the tax on sale of goods during a tax period and the tax paid on purchases of the inputs for those goods. But, a layman's view is that it is a new name of sales tax. It
is the brainchild of F Vans Siemens, originating in 1918 as
an alternative to turnover tax in Germany. VAT was introduced
in France in 1954 and gradually came to be an important element
of the tax structure of the European Economic Community. In
India, it has been made applicable from April 1, 2005. In
the context of our country, it is an extended version of the
sales tax. Today, about 130 countries, including Pakistan
(1990), Bangladesh (1991), Sri Lanka (1995), China (1994)
and Nepal (2000), have adopted VAT. |
