Which one of the following is not a feature of “Value Added Tax”?
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It is multi-point destination-based system of taxation.
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It is a tax levied on value additoin at each stage of transaction in production/distribution chain.
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It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer.
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It is basically a subject of the Central Government and the State Governments are only a facilitator for its successful implementation.
VAT is multistage sale tax with credit for taxes paid of business purchases. It is non-cascading. VAT is the indirect tax on the consumption of the goods, paid by its original producers upon the change in goods or upon the transfer of the goods to its ultimate consumers. It is based on the value of the goods, added by the transferor. It is the tax in relation to the difference of the value added by the transferor and not just a profit. Option (4) is incorrect. VAT is a State subject, for which the States are independent in taking decisions. At the same time, the States have freedom for making appropriate variations in their respective State laws consistent with this basic design.