Vat And Accounting and Emerging Financial Services

Kishor V. Bhesaniya

Abstract


Added value Tax [AVT. in the American tax dictionary], Tax on value Added (TVA, as the French & Germans refer to it], and
Value Added Tax [Vat, the popular English usage and also adopted in India] is a concept which originated during the first
quarter of the 20th century. However, it has been practically adopted only since the mid – fifties.
The concept of "Value added" has been familiar from the earning 19205. It has been specifically defined in the context of national income and
social accounts. so, there is a close relationship to social dividends rather than to the base of VAT.
The value Added Tax has been a subject of considerable interest even in India. Though in passing, for instance, the central Excise Reorganization
committee of 1963 made reference to VAT as a probable substitute for the union Excise duties and in the name of General Excise duty. The other
committee argued for its adoption in place of excise duties on select commodities in 1969.
Value Added Tax (VAT) is a multi – point sales Tax with set – off for tax paid on purchases. Unlike the present sales Tax scheme, which is essentially
a single point tax, VAT is charged and collected at each stage of production / processing / trading on the portion of the value added to the goods
sold. It contemplates rebating tax paid on inputs / capital goods and on account of this; it doesn't have any cascading effect. It comes into effect
from April 1, 2005 in place of the sales Tax in various states.


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