• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

A report onValue Added Tax

Extracts from this document...

Introduction

A report on Value Added Tax Submitted by: Alexander Varghese Kolath Vivek C. Nair Introduction Value Added Tax originated in France in 1954 and is under implementation in more than hundred countries. Value Added Tax is perceived by many as means to promote neutrality and uniformity of tax burden and to provide incentives for increased productivity and industrialization. The spread of VAT to the developed and the developing countries alike certainly, makes for an interesting study. Financial Times (London) too stressed the growing importance of VAT when it observed in its centennial review "The economic and technological changes of the second half of the century have made VAT the quintessential modern tax". It will not be an exaggeration if one were to say that the emergence of the VAT as an important and elastic source of revenue over the last four decades is unparalleled in the history of taxation. Despite the widespread proclamation of VAT, there have been difficulties in implementing VAT in its true spirit like in the case of Argentina, Brazil, Canada and India. VAT has been introduced in more than 120 countries - developed, developing and those economies, which are in transition. ...read more.

Middle

When the purchaser purchases the goods, he'll have an invoice which will state the price of the good as well as the VAT paid on it. The tax deducted will be only on the value added at each stage of production. When he sells the goods, he's given a discount on his VAT obligations that he has already met on the purchase of his inputs. Because an offset for input tax is not given without an invoice for purchase of an input, there is an incentive to demand invoices for any purchases made in the chain of production and distribution. This leads to self-assessment of tax by the tax payer himself. Each tax payer is given an 11 digit Tax Payer Identification number. This is used to make a central database of all the states. The database contains all information regarding the VAT paid on purchase of inputs and the amount to be refunded at the point of sale. In order for this to work, a central IT enabled system should be in place. The intra-state operations of the sales tax department have been computerized in many states and this network can be exploited to demat local statutory forms. ...read more.

Conclusion

In fact the new system actually ended up reducing the costs by eliminating cascading taxes to the tune of several billion dollars. Another reason for the delay was the wrangling over the compensation to be paid by the center for the revenue loss for states from the change over. The center has ensured that this will not be so and has assured compensation in case of deficits. If VAT system is adopted there would be no exemptions or incentives. This can adversely affect some business houses. To crown all this there was also political opposition fearing disfavor of the trading community and the resulting political fallout. VAT - the way forward In order to make the VAT a thorough success following could be few suggestions. * The deadline for all legislations and computerizations should be same across the states. * VAT should be implemented by all the states at the same time. * Laws regarding VAT should be uniform across all the states and there should be no disparity among the states. * There should be a monitoring mechanism at the central to overlook the new system. * A lot of changes have to be made in ancillary legislation (income tax, company law etc.) to ensure VAT compatibility. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level ICT in Business section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level ICT in Business essays

  1. For my business report I am investigating the Co-op erative society supermarket.

    that the product is of quality * Persuading the customers to buy the product * Ensuring that the customers gain satisfaction from the use of the product or service The main aim and type of promotion will affect the range and style of the promotional materials.

  2. Business report on Marks and Spencer.

    This is the first time Marks & Spencer has teamed up with a high profile sportsman in this way. David Beckham is enthusiastic about the prospect of working alongside Marks & Spencer. He said, "For some time now I have been enjoying the creative side of my commercial work and

  1. In this coursework I need to produce a detailed business report on one medium-sized ...

    Customers can earn Clubcard points at: * Tesco stores * Tesco petrol stations * B&Q * Energi - through Norweb * Tesco Personal Finance * Tesco Home Shopping. In addition Clubcard has recently been extended to Ireland and to the Tesco Vin Plus store near Calais.

  2. Critical Success of PVR cinemas in India

    Hence films can be allocated to screens based on their popularity. This leads to better occupancy 2. Greater number of shows - because of more number of screens, a variety of different movies to suit tastes of different audience segments can be shown.

  1. Implementation of ATMS at SBI. Banks in India are looking at deploying biometric ATMs ...

    In this case, transactions at an ATM are restricted to customers of the ATM branch and its link branches. The stand-alone ATM may be "online" or "offline". � Networked: When ATMs are connected to an ATM network, they are said to be "networked".

  2. Businesses and taxation

    Another possible route to growth is for a business to change its ownership structure e.g. by becoming a company or a limited partnership. In the UK, large numbers of small enterprises operate as sole traders (one owner), or ordinary partnerships (small number of partners).

  1. Business Report on Manchester Airport PLC.

    This means * That all actions taken by the airport are the actions of the company not the individual * The continuity and legal position of the company is unaffected by the death, retirement or withdrawal of a shareholder Shareholders enjoy limited liability This means: * The owners only risk

  2. Executive Summary - Ice Dreams

    700 Virgin FM (London) 30 second spot,Thursday - Friday (1600hrs - 1900hrs) 650 Virgin Radio (AM/National) 30 second spot, Thursday - Friday (1600hrs - 1900) 1,100 Another means of identification used in advertising is 'social grade'. This is a classification based on the occupation of the head of the household, and it indicates the household's spending power.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work