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Value added tax


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Value added tax

  1. 1. Welcome<br />To The <br />Presentation <br />Of<br />V .A. T.<br />Dt: 30/12/2009<br />Presented by:<br />Sachin Ghulyani B-12<br />Gopi Gosai B-13<br />Hiral Panchal B-32<br />Amit Gurav B-14<br />Presented to:<br />Dr. H. Rathod<br />
  2. 2. Summary<br /><ul><li>What is VAT
  3. 3. History
  4. 4. Why a change in TAX system
  5. 5. How does VAT affect India.
  6. 6. Advantages and disadvantages of VAT
  7. 7. Conclusion</li></li></ul><li>Day to Day example of VAT<br />V.A.T @ 12.5% (Rs.1750)<br />Rs.15750<br />Nokia 5800 Rs.14000<br />
  8. 8. What is VAT???<br />
  9. 9. Value Added Tax is a multi point sales tax with set off for tax paid on purchases.<br />It is basically a tax on the value addition on the product.<br />
  10. 10. <ul><li> TAX is the money that people have to pay the government, which is used to provide public services.
  11. 11. And also the money collected has become an instrument of fiscal policy to stimulate economic growth and to maintain economic stability in the country</li></li></ul><li>History in India<br />
  12. 12. WHY - A - NEW - TAX - SYSTEM?<br />There are seven significant<br /> reasons to reform the tax system<br />
  13. 13. 7 Reasons<br />The current system was <br />too complex<br />2. It got too easily exploited <br /> by political reasons<br />
  14. 14. 7 Reasons<br />It created a poor <br />economic impact<br />4.It was a bureaucracy <br /> Out of control<br />
  15. 15. 7 Reasons<br />5. VAT requires a large number<br /> of professionals<br />6. VAT forces business managers <br /> to make decisions based on <br /> taximplications rather than <br />good business<br />
  16. 16. 7 Reasons<br />7. It was inefficient<br />
  17. 17. How do Sales Tax and VAT differ???<br />
  18. 18. Goods<br />Under VAT<br />
  19. 19. Calculation of VAT<br />
  20. 20. How does it Affect India.<br />In the above diagram.<br /><ul><li>Deadweight loss: the area of the triangle formed by the tax income box, the original supply curve, and the demand curve
  21. 21. Governments tax income: the grey rectangle that says "tax”
  22. 22. Total consumer surplus after the shift: the green area
  23. 23. Total producer surplus after the shift: the yellow area</li></li></ul><li>THE ULTIMATE EFFECT<br />Rs. 85,000,00,00,000<br />Eighty Five Thousand Crore Rupees.<br />
  24. 24. Advantages of V.A.T<br />Easy to Administer and Transparent.<br />2. No Cascading Effect.<br />3. Minimum Exemptions.<br />
  25. 25. Dis-Advantages of V.A.T<br />Detailed Records.<br />Causes Inflation.<br />Increase in Investment.<br />
  26. 26. The Final Word!!<br />
  27. 27. …Questions…<br />
  28. 28. Presented by:<br />Sachin <br />Ghulyani<br />Gopi <br />Gosai<br />Hiral <br />Panchal<br />Amit <br />Gurav<br />