What is the full form of VAT?

Answer:

VAT: Value Added Tax

The full form of VAT is “Value Added Tax“. A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. It is a type of tax that is assessed incrementally. It is levied on the actual transaction value of a product or service at each stage of production, distribution or sale to the end consumer, except where a business is the end consumer which will reclaim this input value. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed. It has similarities and is often erroneously compared to a sales tax.

VAT is implemented in almost all countries in the world as it contributes significantly to the GDP of a country. In the United States, currently, there is no federal value-added tax (VAT) on goods or services. Instead, a sales and use tax is used in most US states. In India VAT was introduced into the Indian taxation system as an indirect tax from 1 April 2005 to replace the existing general sales tax. A few Indian states (Gujarat, Rajasthan, MP, UP, Jharkhand and Chhattisgarh) excluded themselves from VAT during its initial introduction, but later adopted the tax. There is uniform VAT rate of 5% and 14.5% all over India. After the introduction of GST, VAT is no more applicable in India.

Other full forms of VAT