What is VAT ?
To put it simply, Value Added
Tax or VAT for a dealer is the difference of tax payable
on sales effected by him during a tax period after
deducting therefrom the tax paid or payable on purchases
effected from within West Bengal, during the same
period.
The essence of VAT is in providing
set-off through the concept of input tax credit or
rebate for the tax paid or payable by a registered
dealer while purchasing goods in West Bengal (input
tax) against the tax payable on the sales effected
by him in West Bengal (output tax). The VAT is based
on the value addition to the goods, and the related
VAT liability (net tax) of the dealer is calculated
by deducting input tax credit from the tax collected
on sales during the tax period (say, a month).
VAT is equivalent to the sales
tax at retail level but is collected through the entire
chain of production and distribution within the State.
