You can try the full form of VAT and gain confidence at least in VAT meaning. Edumantra takes good care of you so buying books for competitive exams is not necessary. Additionally we would like to tell that the full form of VAT is Value Added Tax.
The abbreviation, acronym or full form of VAT is Value-added Tax
Abbreviation, Acronym & Full Form of VAT
Value-added tax is a form of consumption tax which is a tax on the purchase price of an item. The purpose of VAT is to generate tax revenues to the government similar to income tax. The VAT is similar to sales tax where only the end consumer is taxed.
The VAT is most commonly used in the European Union. Different VAT rates are employed in different member states of the EU. The minimum VAT rate for the EU members is 15%. However, the reduced rate of VAT can be as low as 0%. The rate is determined by the VAT authorities of different countries.
In the present scenario, VAT is followed in over 160 countries. VAT proposed by the Indian system resembles the State sales tax system.VAT was introduced to eradicate the increased acts of smuggling and cheating which were resultants of high sales taxes and tariffs.
History of VAT –
- The VAT was first introduced in France as taxe sur la valeur (TVA). In 1954 the French Economist, Maurice Laure initiated the concept of VAT which came into effect on April 10, 1954.
- Initially, VAT was introduced for large businesses of France, but with the advent of time, VAT was employed for all business sectors of the country.
- Later VAT became one of the major sources of state finance in France.
How can we recover VAT?
Individual consumers cannot recover VAT on the purchases made by them, but businesses can easily recover VAT on the services and materials, which are bought by them in order to continue the supply of products and services.