What is the full form of VAT

VAT: Value Added Tax

VAT stands for Value Added Tax. It is a common form of indirect tax which is imposed only on tangible goods or products. It is imposed at each stage of production involved in turning raw material into finished goods and at the point of sale.

Brief History

VAT is not applicable on services as service tax is imposed separately on services. It is collected by the Central and State governments. Its chargeability varies from state to state. VAT is implemented in almost all countries in the world as it contributes significantly to the GDP of a country.