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VAT

Consider the ...

Question

Consider the following statements:
1. Value-added tax was Introduced for the first time in France.
2. Value-added tax is levied on the added value that results from each exchange.
Which of the statements given above is/are correct?

A

Only 1

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B

Only 2

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C

Both 1 and 2

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D

Neither 1 nor 2

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Solution

The correct option is C Both 1 and 2
VAT is a type of consumption tax placed on a product whenever value is added at a stage of production and at final sale. It was introduced for the first time in France in 1954.

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Q. MODVAT is different from VAT in the sense that:
1. Under MODVAT, tax is levied only on value addition while under VAT, excise Is imposed on final value and then rebate is given on inputs.
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Which of the statements given above are correct?

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