TAXATION

TAXATION

Acts of taxing is called taxation. In taxation we will study about following taxes:-

VAT: - Value Added Tax is called VAT. It is based on value addition to the goods. It states level tax charge on purchase/ sale of goods. VAT is paid by producer, manufacturer, retailer or any other. It also gives benefit to common man, businessman and also to government. France is the first country who adapted VAT in 1952. In India VAT was started from 1984 but due to some political reason it was not applicable at that time. VAT is applicable in Haryana in 2005 and Uttar Pradesh in 2008 till today.

Basic terms used under VAT:-

    1)    Input VAT: - The VAT which we pay at the time of purchase is called Input VAT.

    2)    Output VAT: - The VAT which is charged at the time of sale is called Output VAT.

    3)    VAT Payable: - The VAT which is paid to government is called VAT Payable.

    4)    VAT Refundable: - When VAT is returned by the government then it is called VAT Refundable.

    5)    VAT TIN (Tax Identification Number):- When a dealer registers himself under VAT then the government issues eleven alphabetical or numerical digit to the dealer is called VAT TIN.

    6)    VAT Rate: - Government defines four types of VAT rate in Uttar Pradesh:-

                i.            VAT @ 1% :- This VAT rate is specified for gold, silver, stone, etc.

   ii.            VAT @ 4% :- The large number of goods (270) of basic necessity such as medicine, agricultural products, raw material, etc. are declared under this VAT rate.

  iii.            VAT @ 12.5% :- All types of finished goods such as Parle-G biscuit, refined oil, etc. comes under this VAT rate. It consists 234 items.

  iv.            VAT Exempt : - All the natural products that are free from tax come under this VAT rate.

Types of dealer:-

     a)    Registered Dealer: - The dealer whose gross turnover is more than 5 lakh, comes under Registered Dealer. Registered dealer are of two types:-

                              i.            Regular Dealer: - The dealer whose gross turnover is more than 5 lakh, then he comes under Regular Dealer.

                             ii.           Composit Dealer: - The dealer whose gross turnover is in between 5 to 50 lakh, comes under Composit Dealer.

     b)    Unregistered Dealer: - The dealer whose gross turnover is not more than 5 lakh, comes under Unregistered Dealer.