VAT on all imports.

Sir,
I am confused;
If you pay the VAT on import or the VAT on sale, it amounts to the same thing.

Let me explain :-

When you buy a Dynaudio speaker from Sound Smiths for Rs. 100/- it is billed to you @ Rs. 100/- + 12.5 % VAT.
When you sell it to Mr. X @ Rs. 125/-, you will bill Mr. X @ Rs. 125/- + 12.5 % VAT.

The VAT you paid is Rs. 12.5
The VAT you collected is Rs. 15.625

Now, you will have to pay the difference of Rs. 15.625 - 12.5 = Rs. 3.125 a VAT.

It is rather simple.

In VAT system only the value adddition is being taxed. So the price will never go up by the % of VAT levied.

Like in the example given by Bhagwan

Value addition by dealer is Rs 25 and the increase in price to end user is only 25 * 12.5% = Rs. 3.125

We all should welcome VAT, it gets us rid of the cascading effect of taxation.

warm regards

Anil

spot on Bhagwan...!

manek.

Agreed Bhagwan & Anil, your spot on. Only hope that some day things are the same as other countries.

VAT is very important and its the best thing that happend. Makes things very clear for all of us (customers, and traders).

YAH !

And makes Taxes Uniform so that others too feel the pinch that we have been paying in Maharashtra....

.... Maybe one day .....

Ampnut there is an unified tax rate for most of the comodities, but most states make use of the condition that the unified tax rate is the floor rate, induvidual states can chrarge higher rate of tax.

Let us hope and pray that Excise duty as well as CST is wiped off and true VAT system impemented with an unified tax rate for all items except a few like sugar, wheat and rice

ani schrieb:

Let us hope and pray that Excise duty as well as CST is wiped off and true VAT system impemented with an unified tax rate for all items except a few like sugar, wheat and rice :)

That is not possible.

CST may go, and actually will.
But Excise can never go. That will always remain.
I would be happy to see all other indirect taxes go - octroi / CST etc.

If the govt. removes Excise, it will go bankrupt. So that is very very difficult.

bhagwan69 schrieb:

That is not possible. CST may go, and actually will. But Excise can never go. That will always remain. I would be happy to see all other indirect taxes go - octroi / CST etc. If the govt. removes Excise, it will go bankrupt. So that is very very difficult.

Precisely.

Excise will remain. What should be abolished is octroi and CST.
CST is going to be phased out in 4 years, starting with April 07. There will be a reduction of 1% every year.
Goods should be allowed to move freely within the states without any requirements of various forms and documents.
Infact certain analyst have worked out a strategy which proves that cst and octroi can be abolished and the same will be compensated by a slight increase in VAT, which will then remain uniform throughout the country.

Also the duty should be reduced every year, which has been happening.
They should get rid of the Special Additional Duty of 4%. (it really is SAD)

Regards
SNV