What is the difference between a VAT and a GST? Are they two names for the same thing?

 

VAT and GST are two different things. Although both of them are taxes but they both comprise of different things and have different sets of benefits as well as drawbacks.

Goods and Service Tax India is the tax system’s modern and incredibly evolved approach and reflects the peculiar ‘one country, one tax’ philosophy. The aim of this taxation scheme was to remove the main issues found under the Vat system, such as with the cascading tax impact on the tax imposed on a commodity at each point of the sale. The final customer was, in fact, obliged to pay that tax on the tax already collected.

As a substitute for the previous ‘Sales Tax’ scheme, Value Added Tax was implemented in 2005. It is an indirect tax imposed at any stage of the supply chain and is applied to those main goods which are not taxable underneath the GST Act, along with petrol, diesel and alcohol for human consumption.

Given the primary distinctions amongst GST and VAT, the new law on goods and services has proven to be in several respects extra effective. At present, nevertheless, there are indeed a few items which are not included in the GST, such as gas, diesel and alcohol. We should plan to bring goods and services to be used in the together under scheme with the evolution of GST.Since, according to esteemed economists, VAT and GST are respectively two names for one tax, the distinction can be observed when scrutinized minutely.

Vat is taxed on the scale of Goods (Services tax is incorporated for Services) respectively. It is applied at the period of sale of any good. All the tax rates and laws sustaining it are different in every state of India. All the collected VAT is confined to the state in which sale of goods takes place. The dates to fill returns are 10th,15th and 20th of the next month for the preceding one. Payments take place through offline methods only. There is no input tax credit benefit available on custom duty paid. Compliances for the movement of goods inbetween states differentiate from one particular stateregion to another particular state region. The seller state collets VAT.

Whereas in the case of GST consumer state is the one collects taxes and there is a maintained set of compliances made for the movement of goods and services rom a particular region state to another state region. The mode of payment accepted in GST is both offline and online although online payments are necessary when the required amount to be paid is greater than the sum of INR 10,000. The returns of GST can be filed on every 20th of next month for the previous month. The state and Central government share the authority over collected taxes. The most beneficial part of the GST is that tax rate and laws are uniform across India.

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