abhishreshthaa
Abhijeet S
SIMILARITIES BETWEEN VAT AND ST:
Essentially, both are “tax” on sale or purchase of goods.
The levy or the incidence of tax could more or less be the same.
It is payable by a dealer (liable to tax).
The administrative procedure for the levy and collection of tax including Registration, Returns, payments, Assessments, etc. may more or less remain the same, with some procedural changes.
In other words, it can be said that the new Law and the Rules give effect to the basic scheme providing for VAT and everything remains the same.
DIFFERENCES BETWEEN VAT AND ST:
Under ST regime, the seller pays a single point sales tax, along with additional levies, if any. Resellers are generally not subject to tax except for resale tax.
Under ST laws, many general or specific exemptions are granted. VAT laws are likely to do away with the same.
Under ST laws, concessional rate, since it would allow entire credit for the entire tax paid earlier.
In VAT system, the first seller will pay the first point tax and subsequent sellers will pay tax only on the value addition done by them resulting into a total tax burden usually equal to the last point tax.
The other noticeable differences, which may be found in VAT laws, could be:
• Uniform classification of goods by the states.
• Fewer rates.
• Different methods of assessment (like, Audit, intimation, etc)
• Provisions relating to credit or set-off
• Tax invoice.
Essentially, both are “tax” on sale or purchase of goods.
The levy or the incidence of tax could more or less be the same.
It is payable by a dealer (liable to tax).
The administrative procedure for the levy and collection of tax including Registration, Returns, payments, Assessments, etc. may more or less remain the same, with some procedural changes.
In other words, it can be said that the new Law and the Rules give effect to the basic scheme providing for VAT and everything remains the same.
DIFFERENCES BETWEEN VAT AND ST:
Under ST regime, the seller pays a single point sales tax, along with additional levies, if any. Resellers are generally not subject to tax except for resale tax.
Under ST laws, many general or specific exemptions are granted. VAT laws are likely to do away with the same.
Under ST laws, concessional rate, since it would allow entire credit for the entire tax paid earlier.
In VAT system, the first seller will pay the first point tax and subsequent sellers will pay tax only on the value addition done by them resulting into a total tax burden usually equal to the last point tax.
The other noticeable differences, which may be found in VAT laws, could be:
• Uniform classification of goods by the states.
• Fewer rates.
• Different methods of assessment (like, Audit, intimation, etc)
• Provisions relating to credit or set-off
• Tax invoice.