Value Added Tax is a multi-point sales tax. It is basically a tax on the value addition of the product. The burden of tax is ultimately borne by the consumer who purchases the goods. In many features it is similar to last point sales tax. Value Added Tax in India is one of the most important components of tax reforms. VAT is referred as a multi point destination based system of taxation. Value Added Tax is charged at every step of transaction in the supply chain.VAT is actually a state subject in India; states have the authority in making decisions. State governments ensure the levy of VAT in each state with the help of tax departments in their respective states. The Central government is influential in guiding the state government with respect to execution of VAT. The department of revenue under the Ministry of Finance is given the complete authority to have control with respect to direct and indirect taxes, through two statutory boards such as;
- Central Board OF Direct Taxes (CBDT)
- Central Board Of Customs and Central Excise (CBEC)
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