Question

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

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

Answer 1

The correct option is C

It is a tax on the final consumption of goods or services and must ultimately be borne by the consumer
A value-added tax (VAT) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.