Value Added Sales Tax Information System VAT

Abstract

Value Added Sales Tax Information System is an IT Solution for the Value Added Tax (VAT) System. Value Added Tax 2005 is a tax that applies to all commercial activities involving the production and distribution of goods and provision of services. It is a consumption tax, borne ultimately by the final consumer. It is charged as a percentage of price. Vat is charged by State government and it is intra state sales tax (sales within the state).VAT is administered by HM Revenue and Customs. Each State and Union territory has formulated its VAT legislation except for “ANDAMAN & NICOBAR”. VAT has been introduced in Indian Taxation System from April 1, 2005. The Value Added Sales Tax Information System is an application based intended for retailers. The main objective of this application is to make it interactive and its ease of use. It would make calculating tax process easier. VAT is a multi-stage tax levied at each stage of the value addition chain, with a provision to allow input tax credit (ITC) on tax paid at an earlier stage, which can be appropriated against the VAT liability on subsequent sale. Value Added Sales Tax Information System is an IT Solution for the Value Added Tax (VAT) System. Value Added Tax 2005 is a tax that applies to all commercial activities involving the production and distribution of goods and provision of services. It is a consumption tax, borne ultimately by the final consumer. VAT is intended to tax every stage of sale where some value is added to raw materials, but taxpayers will receive credit for tax already paid on procurement stages. Thus, VAT will be without the problem of double taxation as prevalent in the earlier Sales tax laws. Presently VAT is followed in over 160 countries. The proposed Indian model of VAT will be different from VAT, as it exists in most parts of the world. In India, VAT has replaced the earlier State sales tax system.