If a firm produces goods with Rs. 10,000 and the cost of raw materials is Rs. 10,000 and the firm will pay tax on Rs. 4000. It is paying tax according to:

VAT

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CENVAT

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MODVAT

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None of the above

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Solution

The correct option is A VAT
The firm is paying tax according to the VAT system. VAT stands for Value Added Tax, which is a type of tax that is assessed incrementally, based on the increase in value of a product or service at each stage of production or distribution.

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If a firm produces goods with Rs. 10,000 and the cost of raw materials is Rs. 10,000 and the firm will pay tax on Rs. 4000. It is paying tax according to:

The correct option is A VATThe firm is paying tax according to the VAT system. VAT stands for Value Added Tax, which is a type of tax that is assessed incrementally, based on the increase in value of a product or service at each stage of production or distribution.

The correct option is A VAT
The firm is paying tax according to the VAT system. VAT stands for Value Added Tax, which is a type of tax that is assessed incrementally, based on the increase in value of a product or service at each stage of production or distribution.