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Limitations of VAT

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked over 2 years ago

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4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

VAT is costly to implement as it is based on full billing system. VAT is relatively complex to understand. The calculation of value added in every stage is not an easy task. To implement the VAT successfully, customers, need to be conscious, otherwise tax evasion will be widespread. The Best of Brian Tracy Cause Inflation

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Data?1494421730 rohit awasthi answered over 2 years ago

Dear Uma > Limitations of VAT -- VAT was to be applied in all states but it failed to do so. -- Inflation rate has been increased due to VAT. -- VAT has complicated both tariff in customs and excise and Overburdend with more exemptions -- VAT is regressive :- It’s burden falls disproportionately on Poor people since the poor are likely to spend more of their incomes -- VAT is too difficult to operate from the position of both the Administration and business. -- Monthly Return : The manufacturer is required to pay CenVAT on a fortnightly basis and submit a monthly return (ER1) to the Superintendent of Central Excise by the 10th of the month Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 2 years ago

LIMITATIONS OF VAT There are different vat rates in different cities There is no input credit for interstate purchases. For complying with the VAT provisions the accounting cost will increase. There is increase in other costs like working capital and interest There will be more administrative burden The rate of vate is generally high. Thanks

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Name commented about 1 year ago

Nice & Easy explaination

Open uri20170510 32134 1jb1dwr?1494421680 Vaibhav answered over 2 years ago

dear uma, following are the limitation of VAT : - VAT is costly to implement as it is based on full billing system. - VAT is relatively complex to understand. The calculation of value added in every stage is not an easy task. - To implement the VAT successfully, customers, need to be conscious, otherwise tax evasion will be widespread. The Best of Brian Tracy - Cause Inflation - Refund of Tax(VAT credit can not be availed if no tax is payable on final product being exempt or taxable at lower rate.) - Non-availability of credit for tax paid on interstate purchases in initial years.

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Name commented about 1 year ago

Nice & helpful Explaination

Vaibhav commented about 1 year ago

Thanks... Please follow me if you want more answers...

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