Question

WHAT IS THE DIFFERENCE BETWEEN TAX &VAT

Answer 1

The tax levied on the sale of goods within a state is called sales tax.

Every state government need money to meet expenses such as development of the state, payment of salaries to its employee, health, education etc. Hence, every state government levies sale tax.

VAT is the new method of raising tax on the sale or purchase of good within a state. It is the replacement for sales tax. The difference between the tax paid on the sale value and the paid on the purchase value is deposited with the government as VAT.