VAT – VAT is the Local Sales Tax. It is a tax on final consumption of goods.
à Credit on VAT paid – A manufacturer is entitled to get tax credit on the taxes paid by him on the inputs purchased by him within the state.
Whereas a dealer is entitled to get tax credit on the taxes paid by him on the purchases of the items for resale.
à A registered Manufacturer or a Dealer gets an 11 digit TIN no.(Tax Identification Number) .
Those who don’t have TIN are called Unregistered Dealers.
VAT returns are to be submitted in particular Sales Tax Authorities (STA’s) monthly.
à Components of VAT – a) VAT, b) Additional VAT (ADVAT)