How VAT is differ from sales tax? and what are the similarities we can find out between sales tax and vat?
1.For all the goods and services, sales tax is not applicable. VAT is applicable for virtually all the good and services. 2.Generally VAT applies on full price payable by the consumers, which means an improved value base comparison with the Sales Tax, where tax only to the value of imports or the exfactory value of goods. 3.In VAT, collections, remittances to the government, and credits for taxes already paid occur each time a business in the supply chain purchases products, where in Sales tax, tax is collected and remitted to the government only once, at the point of purchase by the end consumer. 4.Sales tax is a kind of direct tax where as the value added tax is a part of indirect tax.
As per the Laws, sellers can calculate the tax separately from the price of the goods or services, or require it to be included in the price, which is called tax- inclusive. Amount of tax is generally calculated by applying a percentage rate to the price of a sale, which is taxable. Tax paid on goods or services directly to a governing body by a consumer, it is generally called a use tax. Certain goods or services get exemption from sales and use tax basis on the law guidelines. Sales tax calculation done by multiplying the current tax rate with the cost of an item.