Question

Define Input Tax related to VAT.

Answer 1

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The tax paid by a dealer on his/her purchases of goods for resale(subject to tax under VAT) during any fixed tax perios is called Input Tax. The Input Tax is calculated on all taxable purchases at the applicable tax rates.

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Answer 2

Input tax is the tax paid on purchases by a registered dealer in course of its business. ... When a dealer that is registered for value added tax (VAT) buys goods or services from another supplier, VAT is charged and is a particular percentage of the purchase cost. This is known as input tax.