Register now or log in to join your professional community.
vat means value added tax at each and every stage where value added of goods, while sales tax which collect on state or district level tax where goods transfer from one district/ state to another..
THE VALUE ADDED TAX IS A FORM A INDIRECT TAX THAT IS IMPOSED AT DIFFERENT STAGES OF PRODUCTION ON GOODSAND SERVICES. WHERE AS SALES TAX IS VALUED AT TOTAL VALUE OF GOODS AND SERVICES PURCHASED.
VAT is applied on each stage of supply whereas Sales Tax is levied on Final Consumer
In my point of view:
Sales tax: The final consumer pays this.
VAT: All purchasers pay this.
“VAT” meaning “value addition tax” and “value addition tax” mean in every stage tax value will be add at the time of sale.
Example of VAT:
Suppose one product which is manufacture by Amjad and Sale to Zain person, Zain person sale to Faisal person, and then Faisal person sale to Khalid person and so on.
Amjad Manufacturer: Pay sales tax and adjust input.
Zain Seller: Increase value of product for earn profit and pay tax and adjust input.
Faisal Seller: buy from Zain and Increase value of product for earn profit and pay tax and adjust input.
Khalid Seller: buy from Faisal and Increase value of product for earn profit and pay tax and adjust input.
When, when value will be adding in original price every will pay a tax and adjust input.
Example of General Sales Tax:
While the other sales tax which is pay by final consumer, he will consume this product and will not add profit in original price and will not sale again and re-calculate this for new sales tax amount. So, this is not called VAT because he is not adding.
I hope this is easy to understand.
The Value Added Tax is a form of indirect tax that is imposed at different stages of production on goods and services. ... Sales tax, as compared to VAT is the percentage of revenue imposed on the retail sale of goods.
VAT is short form for value added tax. The VAT is a form of indirect tax on goods and services charged at various stages of it's production. at diffrent stages of production. On the other hand sales tax is colllected by the retailor when the final sale in the supply chain is reached via a sale to end consumer. End consumer pay the sale tax on the purchases.
VAT is accounted and paid at each stage of commercial activity when value is been added to goods or services. Under VAT there will be input tax credit is given to manufacturer, supplier and retailers. Sales Tax, levy is collected and paid by the retailer from the customer directly and there is no input tax credit.
VAT is a tax that apply at each transaction in a supply chain however, sales tax shall be applies only at last transaction i.e. where consumer purchases the goods in the supply chain.
The VAT is a form of indirect tax that is imposed at different stages of production on goods and services. Sales tax, as compared to VAT is the percentage of revenue imposed on the retail sale of goods. Unlike VAT, sales tax is levied on the total value of goods and services purchased.
Actually VAT collected at each stage of supply chain of goods and services like,
Suppliers,
Manufacturer
Distributor
Retailers.
As the value added, VAT is liable. But sales tax is liable on final sale only. Thanks
whereas sales tax is collected on final sale only by retailer.
VAT collected at each stage of supply chain of goods and services whereas sales tax is collected on final sale only by retailer.
