Question

77.Which one of the following is not a feature of “Value Added Tax”?

• A. a) It is a multi-point destination-based system of taxation
• B. b) It is a tax levied on value addition at each stage of transaction in the production-distribution chain
• C. c) It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
• D. d) It is basically subject of the Central Government and the State Governments are only a facilitator for its successful implementation

Answer 1

The correct option is D d) It is basically subject of the Central Government and the State Governments are only a facilitator for its successful implementation

Answer: D

Explanation: A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale.. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.

For example, when a television is built by a company, the manufacturer is charged VAT on all of the supplies it purchases to produce the television. Once the television reaches the shelf, the consumer who purchases it must pay the applicable VAT.