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

Answer:

A value-added tax (VAT), known in some countries as a goods and services tax (GST), is a type of tax that is assessed incrementally. Like an income tax, it is based on the increase in value of a product or service at each stage of production or distribution. However, a VAT is collected by the end retailer and is usually a flat tax, and is therefore frequently compared to a sales tax.